Term or permanent life insurance: the tipping point by age
Term insurance costs four to six times less for the same amount. So why does permanent insurance exist? Because the right question is not “which one is cheaper”, it is “how long will the need last”. Here are the real rates, and the rule.
There are two ways to insure a life. Term insurance covers a number of years set in advance, 10, 20, 25 or 30, for a premium that does not move during the term; when the term ends, the protection stops or renews at a much higher price. Permanent insurance covers you until death, whatever your age, for a premium fixed for life, and builds a cash value. Everything else follows from that difference.
The real rates, side by side
Lowest monthly premium in our survey of October 30, 2026 for $100,000 of coverage, healthy non-smoker.
| Age | 20-year term, woman | Permanent, woman | 20-year term, man | Permanent, man | Ratio |
|---|---|---|---|---|---|
| Age 25 | $9.36 | $40.74 | $10.44 | $48.30 | × 5 |
| Age 35 | $10.08 | $59.92 | $11.34 | $70.69 | × 6 |
| Age 45 | $15.93 | $95.15 | $20.52 | $112.77 | × 5 |
| Age 55 | $39.56 | $145.62 | $55.71 | $171.72 | × 3 |
| Age 65 | $119.79 | $264.06 | $173.70 | $296.10 | × 2 |
WinQuote survey, standard class, non-smoker, $100,000. The ratio is the man’s. Full tables by amount on the term and permanent pages.
The price ratio narrows with age: term insurance is very cheap at 25 because the risk is low, and permanent insurance very expensive because it has to fund decades of protection. At 65, the two prices draw closer together, and term insurance loses its main argument.
What each option really costs over time
Take a 35-year-old man and $100,000 of coverage. His 20-year term costs $11.34 a month, or $2,721.60 over twenty years; at 55, the protection stops or renews at the premium of a 55-year-old man, about $55.71 a month for a new term. His permanent policy costs $70.69 a month, or $16,965.60 over the same twenty years, but the protection then carries on at the same price, at 70, 80 or 90, and the contract has built up a cash value.
Put another way: term insurance is a rental, permanent insurance a purchase. Renting costs less as long as you only need the place for a few years; buying costs more each month, but you end up owning something. Neither is “better”: they answer two different needs.
The simple rule
If the need has an end date, it is a term policy. If it does not, it is a permanent policy.
A mortgage ends. Children become independent. A business loan gets repaid. Those are temporary needs, and insuring them with permanent coverage means paying your whole life for protection you only need for twenty years. Conversely, funeral costs, the estate’s tax bill on RRSPs and capital gains, the support of a disabled child or the wish to leave a net amount never end; insuring them with term coverage means paying for twenty years and then losing everything at the very moment the need arrives.
The tipping point by age
Before 40: term, almost always
The need is enormous, replacing an income for twenty years and paying off a mortgage, and the budget is limited. A 20- or 25-year term protects $500,000 or $1,000,000 for a few tens of dollars a month. Permanent insurance, at that age, is an estate decision: you take a small amount, to lock in a low premium for life, if the budget allows it on top of the term policy, not in its place.
From 40 to 55: both, often
This is the age of the combination: a term policy for the years when the children and the mortgage still weigh, and a more modest permanent policy, $50,000 to $100,000, for what will remain to be paid afterwards. It is also the last window where permanent insurance comes at a reasonable price; the table shows that between 45 and 55, it rises by half.
After 55: permanent, unless the need has a date
The children are settled, the mortgage is ending; what remains to cover, funeral and taxes, does not end. A term policy is now only useful for a specific, dated need, for example a loan that ends at 65. For the rest, fixed-premium permanent insurance is the right tool, and our guide to rates after 50 details the three ways to get it, with or without an exam.
Three traps to avoid
- Choosing permanent “because you end up with something”. The cash value is real but modest; if the goal is to save, the TFSA and the RRSP do better. You take permanent insurance for lifelong protection; the reserve is a bonus.
- Choosing the shortest term because it is the cheapest. A 10-year term at 40 costs less per month than a 20-year term, but renews at 50 at three times the price; over twenty years, it ends up costing more. Match the term to how long the need lasts.
- Overlooking the conversion privilege. It lets you switch to permanent insurance without proof of health up to 65 or 70. For someone whose health changes, it is worth more than a few dollars’ difference in premium between two insurers.
In short
Term for what ends, permanent for what does not, and often a bit of both between 40 and 55. The real rates by age and by amount are in our barometer; the advisor who calls you back, certified by the AMF, prices both options for your situation and tells you where your tipping point is.