Key Takeaways
- 1.A term-10 policy costs approximately $720–$840/year per person at 38. A term-20 costs $1,020–$1,200/year — roughly 40–45% more per year, but locked for twice as long.
- 2.Combined couple premiums over 10 years: $14,400–$16,800 (term-10) vs $20,400–$24,000 (term-20). The term-10 saves $6,000–$7,200 in the first decade.
- 3.At renewal (age 48), term-10 rates jump to approximately $2,100–$2,700/year per person — roughly 3× the original premium. One year of renewal premiums erases most of the 10-year savings.
- 4.Your mortgage balance after 10 years is approximately $950,000 — still 79% of the original $1.2M. You still need substantial coverage at renewal.
- 5.The break-even point is approximately year 13–14. If you need coverage beyond that, the term-20 is the lower total-cost choice from day one.
The Scenario: Alberta Couple, Age 38, $1.2M Mortgage
Both partners are 38 years old, non-smokers, in good health, and each needs $1,200,000 of life insurance coverage to ensure the surviving spouse can pay off the mortgage if one dies. They are buying individual term policies (not a joint policy — we explain why below). The question is whether to buy term-10 or term-20.
Coverage details:
Face amount per person: $1,200,000
Combined coverage: $2,400,000 (two individual policies)
Ages: both 38, non-smokers, standard or preferred health class
Province: Alberta
Mortgage: $1,200,000, 25-year amortization, ~5.00% rate
Purpose: mortgage protection for surviving spouse
Alberta has no provincial sales tax, and the 3% provincial premium tax on life insurance is already built into quoted premiums. All figures below are what you actually pay — no hidden tax surcharges. For a comparison of term vs permanent insurance structures, see our term-20 vs whole life insurance comparison for a BC family.
Annual Premium Comparison: Term-10 vs Term-20 at Age 38
Here is what each term length costs for a 38-year-old non-smoker with $1,200,000 of coverage. These are representative rates based on competitive Canadian life insurance quotes in 2026.
| Metric | Term-10 | Term-20 |
|---|---|---|
| Annual premium per person | $780 | $1,110 |
| Monthly premium per person | $65 | $92.50 |
| Combined annual (couple) | $1,560 | $2,220 |
| Combined monthly (couple) | $130 | $185 |
| Annual difference (couple) | Term-20 costs $660/year more ($55/month) | |
Premiums are mid-range estimates for a 38-year-old non-smoker in preferred health class. Actual rates vary by insurer, exact health classification, family medical history, and occupation. Women typically pay 15–20% less than men; we use a blended average here.
The term-10 saves $55/month ($660/year) for each of the first 10 years. That is real money — $6,600 over a decade for the couple. But the term-10 rate is only guaranteed for 10 years. At year 11, you face a renewal decision that can dramatically change the math.
Cumulative Premium at Year 10 and Year 20
The first 10 years are where term-10 looks attractive. After that, the picture shifts entirely.
| Milestone | Term-10 (cumulative) | Term-20 (cumulative) | Difference |
|---|---|---|---|
| After 5 years | $7,800 | $11,100 | Term-10 saves $3,300 |
| After 10 years | $15,600 | $22,200 | Term-10 saves $6,600 |
| After 15 years (term-10 renewed at 48) | $39,600 | $33,300 | Term-20 saves $6,300 |
| After 20 years | $63,600 | $44,400 | Term-20 saves $19,200 |
Term-10 renewal assumes the couple renews at age 48 at approximately $4,800/year combined ($2,400/year per person) for the same $1.2M coverage. This is a mid-range renewal estimate; actual renewal rates may be higher. Term-20 premium is level for all 20 years.
The crossover happens around year 13–14. Before that point, the term-10 strategy has paid less in total premiums. After that point, the term-20 is cheaper cumulatively — and the gap widens every year. By year 20, the term-10 couple has paid $19,200 more than the term-20 couple for the same coverage period. For a broader look at how term lengths compare across age ranges, see our term-10 vs term-20 vs term-30 life insurance comparison for a Saskatchewan 35-year-old.
Renewal Risk: What Happens at Age 48 If Health Deteriorates
This is the hidden cost of term-10 that most premium comparison websites ignore. At age 48, when your term-10 policy expires, you have two options: renew the existing policy at the guaranteed renewal rate, or apply for a brand-new policy at market rates based on your current health. Here is the problem.
| Scenario at Age 48 | Annual Premium (per person) | vs Original Term-10 Rate |
|---|---|---|
| New term-10 policy, preferred health | $1,560 | 2.0× original |
| New term-10 policy, standard health | $2,040 | 2.6× original |
| Guaranteed renewal (no medical) | $2,400 | 3.1× original |
| New policy, rated health (e.g., new diagnosis) | $3,000–$4,200 | 3.8–5.4× original |
| Term-20 locked rate (no change) | $1,110 | Same rate as day 1 |
Renewal rates are estimates based on 2026 Canadian life insurance market data. Guaranteed renewal rates are published in your original policy contract and are typically the most expensive option. Rated health means a new medical condition has been diagnosed that places you in a higher risk category.
Between ages 38 and 48, the probability of developing a health condition that affects insurability is not trivial. High blood pressure, elevated cholesterol, Type 2 diabetes, anxiety or depression requiring medication, and weight gain are all common developments in your 40s. Any of these can move you from preferred to standard or rated health class, increasing premiums by 50–150% over what a healthy 48-year-old would pay.
The term-20 eliminates renewal risk entirely. Your rate is locked at $1,110/year per person from age 38 to age 58. No medical exam, no health questions, no rate increase — regardless of what happens to your health over those 20 years. The $55/month premium difference is the price of that certainty.
How the Decreasing Mortgage Balance Changes Coverage Needs at Year 10
Your $1.2M mortgage does not stay at $1.2M. Every monthly payment reduces the balance. By year 10, you owe substantially less — which means you may not need the full $1.2M of coverage when you renew.
Mortgage balance over time ($1.2M at 5.00%, 25-year amortization):
Year 0: $1,200,000
Year 5: $1,078,000 (10.2% paid down)
Year 10: $938,000 (21.8% paid down)
Year 15: $775,000 (35.4% paid down)
Year 20: $580,000 (51.7% paid down)
Year 25: $0 (fully amortized)
At the 10-year renewal point, your mortgage balance is approximately $938,000. If you renew your term-10 with a reduced face amount of $950,000 instead of $1.2M, the renewal premium drops proportionally. Here is how that changes the comparison.
| Renewal Strategy at 48 | Annual Premium (per person) | Combined Couple |
|---|---|---|
| Renew $1.2M (full amount, guaranteed) | $2,400 | $4,800 |
| New $950K policy, preferred health | $1,235 | $2,470 |
| New $950K policy, standard health | $1,615 | $3,230 |
| Term-20 (locked, still $1.2M) | $1,110 | $2,220 |
Reducing coverage to $950K at renewal partially offsets the age-related rate increase. However, even a new $950K policy at preferred rates ($1,235/year) still costs more than the locked term-20 rate of $1,110/year for the full $1.2M. The term-20 provides more coverage at a lower premium from year 11 onward.
There is an argument that the decreasing mortgage makes the term-10 strategy workable: you reduce coverage at renewal to match your lower balance, keeping premiums manageable. But the math shows that even with reduced coverage, the new-policy premium at 48 still exceeds the locked term-20 rate for the full $1.2M. The term-20 gives you more coverage for less money from year 11 onward. For context on how Alberta mortgage costs compare to other provinces, see our mortgage amortization calculator for Alberta first-time buyers.
The 10-Year Break-Even Point: When Term-20 Becomes Cheaper
The break-even analysis answers a simple question: at what point does the cumulative cost of the term-10 strategy (initial term + renewal) exceed the cumulative cost of the term-20?
Break-even calculation (couple, $1.2M each):
Term-10 years 1–10: $1,560/year × 10 = $15,600
Term-20 years 1–10: $2,220/year × 10 = $22,200
Term-10 cumulative advantage at year 10: $6,600
Term-10 renewal at 48 (guaranteed rate): $4,800/year combined
Term-20 continues at: $2,220/year combined
Annual cost difference from year 11: $4,800 − $2,220 = $2,580/year
Years to erase $6,600 advantage: $6,600 ÷ $2,580 = 2.6 years
Break-even point: approximately year 12.6 (age 50–51)
If renewed at a new preferred-health rate ($2,470/year combined):
Annual difference: $2,470 − $2,220 = $250/year
Years to erase: $6,600 ÷ $250 = 26.4 years (never catches up within term)
Key insight: The break-even depends entirely on your health at renewal. If you qualify for preferred rates at 48, term-10 remains competitive. If you cannot, the term-20 wins decisively by year 13.
The gamble is your health at 48. If both partners remain in preferred health class at 48 and can qualify for a new policy, the term-10 strategy can work out cheaper. But you are betting that neither partner develops a condition that affects insurability over a 10-year span in their late 30s and 40s — the decade when health issues most commonly emerge. The term-20 removes that bet entirely.
When Term-10 Is the Right Choice
Despite the renewal risk, there are legitimate scenarios where term-10 makes sense for an Alberta couple with a $1.2M mortgage.
Choose term-10 if:
• You plan to aggressively pay down the mortgage within 10 years (lump-sum prepayments, accelerated payments, inheritance expected)
• You expect to sell the property within 10 years and will not need the same coverage level
• You have other substantial assets (investments, business equity) that will reduce your insurance need by age 48
• Your combined household income is expected to rise significantly, making the $55/month difference material today but not later
• Both partners are in excellent health with no family history of early-onset conditions and are confident about qualifying for a new policy at 48
Choose term-20 if:
• You plan to carry the mortgage for the full 20–25 year amortization
• Either partner has any health concern that might affect future insurability
• You value rate certainty over the first-decade premium savings
• You want to avoid the hassle and risk of re-qualifying for insurance at 48
• Your budget can absorb the extra $55/month without strain
Why Two Individual Policies Beat a Joint Policy
Many couples consider a joint first-to-die policy to save on premiums. A joint $1.2M policy might cost 15–25% less than two individual $1.2M policies. But joint policies have a critical structural flaw for mortgage protection.
A joint first-to-die policy pays out once — when the first partner dies — and then terminates. The surviving spouse receives $1.2M to pay off the mortgage, but they now have zero life insurance. If they have children or dependents, they are uninsured at a time when they may be grieving and unable to work. If they have developed health conditions, getting a new policy may be expensive or impossible.
Two individual policies mean each death triggers a full $1.2M payout independently. If one partner dies, the survivor still has their own $1.2M policy in force. The extra 15–25% in premium buys a second, fully independent safety net. For a couple with a $1.2M mortgage and dependents, this is almost always worth the additional cost. For more on how permanent insurance alternatives compare, see our term-20 vs universal life insurance comparison.
Lender Mortgage Insurance vs Individual Term Insurance
Your Alberta lender will offer creditor life insurance at the branch when you sign your mortgage. This is not the same product as individual term insurance, and for most couples it is a worse deal.
| Feature | Lender Creditor Insurance | Individual Term Policy |
|---|---|---|
| Coverage amount | Decreases with mortgage balance | Level $1.2M for full term |
| Premium | Flat (same rate, less coverage over time) | Flat (same rate, same coverage) |
| Beneficiary | The lender | Your spouse/family |
| Portable if you switch lenders? | No | Yes |
| Underwriting | Often at claim time | At application (pre-approved) |
The post-claim underwriting issue is the biggest red flag. With creditor insurance, you may pay premiums for years only to have a claim denied because of a pre-existing condition discovered after your death. Individual term policies underwrite you upfront — once approved, the insurer cannot deny a claim for health reasons (after the standard 2-year contestability period). For Alberta couples making mortgage decisions, see our mortgage stress test calculator for an Alberta couple.
Full 20-Year Cost Summary: Both Strategies Side by Side
| Strategy | Years 1–10 | Years 11–20 | 20-Year Total |
|---|---|---|---|
| Term-20 (locked rate) | $22,200 | $22,200 | $44,400 |
| Term-10 + renew (guaranteed rate) | $15,600 | $48,000 | $63,600 |
| Term-10 + new policy (preferred health) | $15,600 | $24,700 | $40,300 |
| Term-10 + new policy (standard health) | $15,600 | $32,300 | $47,900 |
All figures are combined couple premiums. Term-10 renewal figures assume the same $1.2M coverage for conservative comparison. Reducing coverage to $950K at renewal would lower the term-10 renewal premiums by approximately 20%, but the term-20 still wins in the guaranteed-renewal and standard-health scenarios.
The only scenario where term-10 beats term-20 over 20 years is if both partners qualify for preferred-health rates on a brand-new policy at age 48. In that case, the term-10 strategy saves approximately $4,100 over 20 years — about $17/month. In every other scenario, the term-20 is cheaper, often by $3,500–$19,200.
Important Disclaimer
This article provides general information about term life insurance premiums and is not insurance or financial advice. The premium estimates used ($780/year term-10, $1,110/year term-20 per person for $1.2M coverage at age 38) are illustrative and based on competitive Canadian life insurance rates available in May 2026. Your actual premiums will depend on your insurer, exact age, health classification, medical history, occupation, and lifestyle factors. Renewal rates are contractually guaranteed in your policy but vary by insurer. Life insurance in Canada is regulated provincially — Alberta policies are governed by the Alberta Insurance Act. All calculations are approximate and for illustrative purposes only. Consult a licensed life insurance advisor before making coverage decisions.