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11/09/2025
We’ll guide you in comparing both options and help you choose the best coverage to protect your loved ones
Schedule a Meeting!Understanding the difference between term and permanent insurance can make choosing life insurance easier. However, most of us tend to overlook these and end up getting an insurance plan that we never needed. If you are at any stage of buying life insurance, you must have come across this: term vs permanent life insurance in Canada. Which one to choose? Which plan is better for you? There are so many questions that surround us.
In this blog, we are going to learn about this in detail. Here, we will elaborate on the key differences, how they work, and provide you with a simple checklist to follow while choosing your life insurance policy. Let’s get started!
When considering term vs permanent life insurance, you should know in detail about each. Term life insurance offers you protection for a specific timeframe. During this mentioned timeline, if unfortunately, anything happens to you, your beneficiary will receive a payout.
Once the term ends, coverage usually expires. However, some policies may offer renewal or conversion to permanent insurance.
From the point of cost-effectiveness, term life insurance is among the most advantageous tools for Canadians looking to safeguard a mortgage, pay off debts, or ensure the safety of their dependents.
You have to keep in consideration that term life insurance is not a type of investment and does not build any cash value.
Permanent life insurance, on the other hand, provides lifelong coverage, as long as you are paying your premiums. There are certain policies, such as whole life or universal life insurance, that offer a death benefit and build cash value that you can access through withdrawals or loans.
Therefore, when considering term vs permanent life insurance, you need to understand that permanent life insurance can work as both a safety net and an investment option. However, premiums are generally higher for permanent life insurance than for term life insurance.
Canadians often prefer permanent life insurance for estate planning, building a tax-advantaged savings component, or supporting dependents throughout their lives.
So, both of these policies have their own sets of advantages. Let us compare term vs permanent life insurance in detail in this section on five major factors: affordability, duration of coverage, cash value, policy flexibility, and purpose.
When it comes to affordability, term life insurance is cheaper and gives high coverage for lower costs. On the other hand, permanent life insurance costs more but offers protection along with a tax-advantaged way of investment.
Duration is one of the major factors where the difference grows between term vs permanent life insurance. Term life insurance ends after a certain period of time, which can be 10, 20, 30, etc. years, depending on your preference. On the other hand, permanent life insurance lasts a lifetime.
If you are also thinking of building cash value over time, only permanent life insurance provides you with that option. With permanent life insurance, you can borrow or access your savings once required. This is not available for term life insurance.
There are some permanent life insurances, such as the Universal Life insurance, which offer flexible premiums and investment options. In addition, you should note that there are options where term policies can be converted to permanent without medical exams. You can always get in touch with us at Wiseconomy for any answers you need.
The ‘why’ behind choosing the life insurance plan matters the most. Term life insurance can be considered ideal for temporary financial needs and obligations, while permanent life insurance is for long-term protection and planning.
Therefore, these are some of the major differences in term vs permanent life insurance that one should keep in consideration before choosing.
A life insurance plan can really make a positive difference and keep you and your loved ones secure. Hence, if you are considering getting life insurance and term vs permanent life insurance confuses you, here is how you can navigate.
While getting an insurance plan, ask yourself the following questions:
Once you have these answers with you, making the right decision will be easier. In addition, if you need detailed guidance, you can get in touch with us, and we will help you find your ideal life insurance.
Term vs permanent life insurance, both have their own set of advantages. However, what you should choose depends on your priorities and lifestyle. While one covers you short-term and is cost-effective, the other covers you for a lifetime but has costlier premiums.
With the help of the right insurance consultant in Canada, you can find the life insurance plan that will be the most beneficial for you. Stay insured!
Founder, Wiseconomy
Certified LLQP professional with years of experience helping individuals navigate Canada’s financial landscape, select bespoke insurance coverage, and create personalized investment strategies tailored to their unique goals, needs, and long-term financial well-being.
Explore frequently asked questions for quick help, common topics, and essential information.
You need to understand that neither is ‘better’ for everyone. It all depends on your goals and life situations. Understand your requirements and then make your decision.
The coverage usually stops when your term policy expires. However, with some insurers, you can renew your term life insurance at a higher rate or convert to permanent coverage.
Yes. Getting both term life insurance for temporary needs and permanent life insurance for long-term stability and cash value is possible. It offers a more comprehensive, lifelong and affordable coverage to you.
Yes. Permanent life insurance policies build cash value over time. So, post-retirement, if you ever need an emergency fund, this can act as your safety net.
The most common challenge you might come across with your term-life insurance is the fact that it will eventually expire. Moreover, you will have to pay more if you decide to upgrade it to permanent insurance or renew it.
