Term life insurance renewal in Canada: the price that arrives by default

Thinking it through · 7 min read · Published October 29, 2026 · Last updated October 29, 2026

$210 a month to keep the policy you already own; $80 a month for a new one. Those are the estimated costs of $500,000 of 10-year term life insurance for a 50-year-old in Canada, checked on October 29, 2026 — the renewal of an existing policy on one side, a newly applied-for 10-year policy on the other. At 40 the two estimates are identical, $35 each. By 60 they have pulled $320 a month apart. Renewal is rarely a choice anyone remembers making, because on the official insurer pages it is described as the default: do nothing, and the policy renews. The bill for doing nothing deserves a closer look before it arrives.

The two prices, side by side

The estimates above are PolicyAdvisor's published figures for $500,000 of coverage, checked October 29, 2026. They are estimates, not quotes — a real price depends on the applicant and the insurer — but the shape is the lesson, and a second table from the same source confirms it from the annual side. Estimated annual renewal premiums for $500,000 at renewal age 50 run $2,300 with Empire Life, $2,400 with Desjardins, and $2,500 with Canada Life. At renewal age 60 the same three estimates are $5,400, $5,600, and $5,800. Insurer choice moves the renewal bill by a few hundred dollars a year. The renew-versus-replace choice moves it by thousands.

Why the renewal price is built that way

Canada Life's own page on what happens when a term ends is blunt about the mechanics. Renewing is the default: when the original term expires, the policy automatically renews on a yearly basis until its ultimate expiry date if the policyholder does nothing, and the policyholder can notify the insurer if they do not want that to happen. Each yearly renewal costs more than the last, because the policyholder has gotten older. No requalifying is required and no further health questions are asked.

Sun Life describes the same shape from its side: premiums stay the same during the length of the term, the policy automatically renews when the term ends, and renewal can continue only until age 85, when the policy expires. After that expiry, premiums stop — and so does the protection, because beneficiaries are eligible for the death benefit only while the policy is active.

Put those mechanics together and the renewal price stops looking like a penalty. Renewal is priced at the attained age, with no health questions, for a pool of people the insurer cannot screen. A healthy 50-year-old is not really the customer that price was built for — the customer is the 50-year-old whose health has changed and who cannot pass underwriting for a new policy at any price. That is also why the gap at age 40 is zero and the gap at 60 is a chasm: the value of a no-questions guarantee grows with age, and so does its cost.

The ten-year total: a floor, not a figure

Comparing one renewal year against one new-policy year still understates the difference, because the two prices behave differently over time. A new term policy's premium stays level for the length of its term — Sun Life states that directly — while a renewed policy's premium rises every year, as Canada Life states. So run the age-50 estimates over the ten years a household might actually keep the cover, with the assumptions labelled:

The renewal decade's true total cannot be printed from these sources, because the yearly increases are set in each policy's own schedule — and that is precisely the point. $25,200 is a floor built by pretending the price never rises, when both insurer pages say it rises annually. Any household comparing a renewal letter against a new-policy quote should compare the new policy's full-term total against that floor, and know the real renewal total sits somewhere above it. A comparison that uses only the first renewal year flatters the renewal route by construction.

The other doors: longer term, permanent, or smaller

Renewal and replacement are not the only two exits from an expiring term, and the other doors close earlier than most people expect.

Convert to a longer term. Canada Life allows conversion to a term 10 or more years longer than the original term, for some or all of the original policy, depending on age and how long the policy has been held. Premiums rise for the new term length, but if the coverage amount stays the same, there is no requalifying and no health questions. That is a middle route the renew-or-replace framing misses entirely: a fresh, level premium period, without underwriting.

Convert to permanent coverage. Canada Life's page states that, in most cases, its term policies can be converted to a permanent plan any time after the first anniversary of the policy — and if the policy was bought at age 69 or older, within the first 2 years. No requalifying, no health questions; the premium is based on the coverage chosen. Note the timing: this door is open years before the term ends, not something unlocked at expiry. Sun Life likewise notes that some of its plans allow conversion to permanent insurance.

Keep the policy and shrink it. PolicyAdvisor's renewal guide lists a plain lever among its rating factors: higher coverage amounts lead to higher premiums, and reducing the coverage amount is one way to lower renewal costs while keeping essential protection. A household whose mortgage has halved since the policy was bought may not need the original amount at the renewal price — renewing $250,000 instead of $500,000 is a different bill from the one in the letter, and it needs no new underwriting either.

Let it end. Sometimes the need genuinely ended with the term: debts cleared, dependants grown, savings built. Ending is a legitimate answer — chosen on purpose, with the Sun Life warning in mind that no death benefit is payable for a death after the policy expires.

Before the renewal notice arrives: a numbered audit

PolicyAdvisor notes that Canadian insurers typically send renewal notices 30 to 60 days before the policy expires. That is a short runway for underwriting a replacement, so the audit belongs earlier — while the current term is still running and every door is still open.

1. Find the policy schedule and write down three dates: the term end, the ultimate expiry (age 85 on the Sun Life terms described here), and the last date for any conversion the contract allows.
2. Read the renewal schedule printed in the contract, not just the first renewal figure. The question is the ten-year floor, not the first year.
3. Re-run the household need at today's numbers: mortgage balance, debts, dependants, years of income still to protect. If the need has shrunk, price the smaller amount before pricing a replacement.
4. Get a quote for a new policy at the current age while there is time for underwriting — and keep the existing policy in force until any replacement is actually issued and accepted.
5. Compare totals over the years the cover will realistically be kept: the new policy's level total against the renewal route's floor. Decide which door — renew, convert longer, convert permanent, shrink, replace, or end — and note the decision where the policy documents live.

What success looks like: the renewal premium never lands as a surprise, the conversion deadlines were checked while they could still be used, and whatever premium is paid next year was chosen against a ten-year total — not accepted by default.

When renewing on purpose is the right answer

None of the arithmetic above makes renewal a mistake in itself. For a policyholder whose health has changed, the no-questions renewal may be the only cover available, and an expensive policy in force beats a cheap application declined. Renewal can also be the honest choice for a short remaining need: a household that needs cover for one or two more years, not ten, is not buying the ten-year floor at all, and a year or two of renewal premiums may total less than the cost and effort of replacing the policy. The trap was never the renewal itself. The trap is paying a price built for people with no other options while still having all of them — and finding out after the first higher payment has already left the account.

— Penny Hughes, Money Writer — Saving Desk