Term Conversion Deadlines Canadians Miss

Your 20 year term is coming up for renewal, your health isn't what it was when you bought it, and you've just noticed a clause called "conversion privilege." Does it still apply, and how long do you have?

That's the question I hear most often about term conversion, usually from people in Burnaby and Coquitlam who bought a policy when the kids were small and haven't looked at it since. The answer is almost always in the contract itself, and the deadlines are stricter than most people assume. Here's how the option works, where Canadians lose it, and what the published rules actually say.

What term conversion is

Term life insurance pays a death benefit only if you die within the term. The Financial Consumer Agency of Canada puts it plainly: once the term expires, "the coverage ends, and your beneficiaries don't receive any payment," and "term insurance policies don't include cash value" (FCAC, Life insurance). Many term contracts, though, carry a conversion privilege. It lets you swap some or all of the term coverage for a permanent policy with the same insurer, without new medical evidence.

That last part is the whole point. If you've had a cancer diagnosis, a heart event or new diabetes since you first applied, a fresh application could be rated or declined. Conversion sidesteps the question. The insurer agreed to take on your risk years ago, and the privilege holds them to it.

The deadlines that actually apply

There's no single national rule for when the conversion window closes. It's a contract term, and it differs by insurer and by product. That's why the first step is always to read your own policy, or ask your advisor to pull the wording.

To show what these windows look like, here's how one large Canadian insurer describes its own term product. Canada Life says you can convert "any time after the first anniversary of the policy and before it expires," and that if you bought the policy at age 69 or older, you can convert "in the first 2 years" (Canada Life, Should I renew my term life insurance?). On a separate page the company notes that "there may be a time period after which your term life insurance policy can no longer be converted" (Canada Life, Converting term life insurance). Other insurers set their own cut-offs, often tied to a maximum age or to the end of the original term rather than any renewal period. Don't assume your contract matches this example.

A few patterns show up across the industry:

• The window usually closes at the earlier of a stated age or the end of the level premium term. Renewal years often don't count.
• Some contracts shorten the window if you bought later in life.
• Partial conversion is often allowed, so you can convert a portion and keep the rest as term.
• Converting generally has to happen while the policy is in force. A lapse at the wrong moment can end the option along with the coverage.

Why Canadians miss them

Renewal lulls people. The FCAC notes that "you might be able to renew certain term policies," and that "your premiums may increase when you renew the policy" (FCAC). Canada Life describes its own renewals as automatic: "When your original term ends, your coverage will automatically renew," with premiums that "will gradually increase yearly as you get older" (Canada Life). So the policy keeps going, the bank draft keeps coming out, and the owner assumes every feature carried over. Often the conversion privilege didn't.

The second trap is the age cap. A 20 year term bought at 50 runs to 70. If the conversion privilege ends at 65, the real deadline arrives five years before the renewal notice does.

The third is health. People tend to think about permanent coverage when a diagnosis makes them think about mortality. By then the only route that skips a medical is conversion, and if the window has shut, there isn't one.

Conversion vs. buying new: what BC's rules say

This part surprises people. In British Columbia, exercising a conversion privilege with your existing insurer is not treated as a "replacement" of life insurance. The Insurance Contracts (Life Insurance Replacement) Regulation excludes cases where "a new contract of life insurance is made with an insurer with whom the applicant has an existing contract of life insurance in furtherance of a contractual privilege exercised by the policyholder" (B.C. Reg. 327/90).

Cancelling your policy and buying a fresh one somewhere else is different. That is a replacement. The regulation requires the agent to "present and review with the applicant a declaration statement" and collect signatures before taking the new application, and it gives the applicant a 20 day right to withdraw after signing (B.C. Reg. 327/90). The Insurance Council of BC reminds licensees that a replacement must be "in the best interests of the insured clients," and that where replacement could hurt the client, the agent "must make every reasonable effort to maintain the existing policy in force" (Insurance Council of BC, 2024).

Why it matters: a new policy restarts underwriting and typically restarts the contestability period written into the new contract. Conversion keeps your original issue date. For someone whose health has changed, that difference can be the whole decision.

What you get, and what you give up

Permanent coverage costs more per dollar of death benefit. The FCAC notes that "term life insurance premiums are generally less expensive than permanent life insurance premiums when you first buy the policy," and that permanent policies "usually build up a cash value" (FCAC). Whole life premiums "won't change as you get older" (FCAC). That's the trade: higher payments now for a price that stops climbing.

Conversion also limits you to the permanent products your current insurer offers. If you're healthy, shopping the market with a new application might fit better and should be compared. If you aren't, conversion is often the only door still open. An independent broker can run both paths side by side.

A checklist before your window closes

• Find the conversion clause in your policy and write down the exact last date.
• Check whether the window ends at an age, at the end of the term, or at the earlier of the two.
• Note whether partial conversion is allowed and whether there's a minimum amount.
• Ask which permanent products are available on conversion. Insurers can limit the list.
• If your health has changed, treat the deadline as firm. Don't wait for the renewal letter.
• If you're still healthy, get a quote on a new policy too, so the comparison is honest.

What this doesn't tell you

The published rules settle less than you'd hope. There's no government standard for conversion deadlines in Canada. The sources above are a federal consumer agency describing term insurance in general, a BC regulation about what counts as a replacement, a regulator's reminder to agents, and one insurer's description of its own product. Your contract may be more generous or stricter, and the only reliable answer is the wording you signed. It's telling that the FCAC's life insurance page doesn't mention conversion at all. Most of this lives in contract language, not in law.

Nothing here can tell you whether permanent coverage is right for you. That depends on your estate goals, your other assets, your health, and whether the higher premium fits a budget that also has to fund a TFSA, an RRSP or a mortgage. Converting a policy you can't afford to keep helps nobody.

This article summarises published rules and research for general information, is current as of October 3, 2026, and is not personalized financial, tax or legal advice.

Sources

• Financial Consumer Agency of Canada. "Life insurance." Government of Canada, page modified October 16, 2025. https://www.canada.ca/en/financial-consumer-agency/services/insurance/life.html
• Province of British Columbia. Insurance Contracts (Life Insurance Replacement) Regulation, B.C. Reg. 327/90. https://free.bcpublications.ca/civix/document/id/complete/statreg/327_90
• Insurance Council of British Columbia. "What to know if you are replacing an existing life insurance contract." September 20, 2024. https://insurancecouncilofbc.com/news/articles/2024/september/replace-life-contract
• The Canada Life Assurance Company. "Should I renew my term life insurance?" https://canadalife.com/insurance/life-insurance/term-life-insurance/renew-term-life-insurance.html
• The Canada Life Assurance Company. "Converting term life insurance to permanent life insurance." https://www.canadalife.com/insurance/life-insurance/converting-term-life-insurance-permanent-insurance.html

If you're in Burnaby, Vancouver or anywhere in Metro Vancouver and you're not sure when your conversion window closes, I'll read the clause with you. Book a free, no-pressure call with Milo. We'll compare conversion against a new application, in English or Tagalog, and you'll leave knowing your real deadline.