What Happens When Your 30-Year Term Life Insurance Expires in Canada?

Key takeaway

When your 30-year term life insurance expires in Canada, coverage ends and no death benefit is payable unless you renew or convert before the expiry date. Most policies offer automatic renewal at significantly higher premiums (5 to 10 times the original rate) and a conversion privilege to permanent insurance without a medical exam — but both have deadlines you must act on before they pass.

What happens automatically at expiry

If you take no action, most Canadian term policies offer automatic renewal on a year-to-year basis at the insurer's attained-age rates. These renewal rates are substantially higher than your original locked-in premiums — often 5 to 10 times higher because they reflect your current age and the increased mortality risk.

For example, a $500,000 policy that cost $45/month during the 30-year term might renew at $250 to $500/month or more at age 60. The coverage continues, but at a cost that is unsustainable for most families long-term.

The conversion privilege: your most valuable option

Most term policies include a conversion privilege that lets you convert part or all of the coverage to a permanent policy (whole life or universal life) without a medical exam. This is extremely valuable if your health has deteriorated since the original purchase.

The catch: conversion privileges have deadlines, typically 5 to 10 years before the term's natural expiry or before a specific age (often 65 to 71). If your 30-year term expires at age 60 and the conversion deadline is age 65, you have a limited window. Check your policy contract now to confirm your deadline.

Option 1: Let the policy lapse if coverage is no longer needed

If your mortgage is paid off, children are financially independent, and your retirement savings are sufficient, you may not need life insurance anymore. In this case, letting the policy expire is the correct decision — there is no refund of premiums (term insurance is pure protection, not savings).

Before making this choice, confirm that your spouse or partner does not rely on the death benefit for estate equalization, final expenses, or income replacement. Many couples overlook one partner's continued financial dependency.

Option 2: Buy a new policy before expiry

If you are still healthy at 55 to 60, you may qualify for a new 10 or 20-year term policy at competitive rates. Applying 6 to 12 months before your current policy expires gives time for underwriting without creating a coverage gap.

New policies at older ages are more expensive than your original rate, but they lock in premiums for another full term — unlike year-to-year renewal rates that escalate annually.

Option 3: Convert a portion and let the rest expire

A partial conversion converts only the coverage you need permanently (estate planning, lifelong dependent protection) while letting the temporary portion expire. This keeps costs manageable while securing essential long-term protection.

For example, converting $100,000 to whole life for final expense and estate needs while letting the remaining $400,000 term coverage expire is a common and efficient strategy.

Planning timeline: what to do 5 years before expiry

Start planning at least 5 years before your 30-year term expires. Confirm your conversion deadline, assess whether you still need coverage, get quotes for new term or permanent policies, and evaluate partial conversion as a strategy.

The worst outcome is discovering your conversion privilege has expired after your health has changed. Proactive planning turns term expiry from a crisis into a managed transition.

Frequently asked questions