Term Life Renewal at Year 10: Why Premiums Jump

If you've ever wondered why the renewal notice on your 10 year term life insurance policy shows a number two or three times what you've been paying, you're not alone. It's one of the most common surprises families in Burnaby and across Metro Vancouver bring to a policy review. The good news is that the jump isn't random, it's usually written into your contract from day one, and you typically have more than one option.

Let's walk through what actually happens at year 10, why premiums rise, and how to think about your choices.

How a 10 year term policy works

The Financial Consumer Agency of Canada (FCAC) describes term life insurance simply: it "pays a death benefit if you die within a specific period," and that period can be "a fixed period, such as a term of 10 or 20 years, or until you reach a set age" (FCAC, Life insurance).

The same FCAC page is clear about renewal: "Your premiums may increase when you renew the policy." It also notes that term premiums "are generally less expensive than permanent life insurance premiums when you first buy the policy," and that term policies don't build cash value.

So the low price you locked in at, say, age 35 was a level rate for those first 10 years only. When the term ends, the policy is priced again for the next stretch.

Why the premium jumps at renewal

The short answer is age. Your renewal premium is based on a person who is now 10 years older, and the risk of dying in any given year climbs steadily through middle age.

You can see this in Statistics Canada's life tables for British Columbia. For the 2022 to 2024 period, the probability that a BC resident dies within one year was (Statistics Canada, Table 13-10-0114):

• about 0.14% at age 35
• about 0.22% at age 45
• about 0.40% at age 55
• about 0.86% at age 65

That works out to roughly a 60% rise from 35 to 45, and close to doubling again from 45 to 55. For BC men specifically, the one year death probability goes from 0.193% at 35 to 0.303% at 45 and 0.534% at 55 in the same table.

Insurers don't price directly off these population tables, and they add their own costs and assumptions. But the pattern explains why a renewal at 45 or 55 costs noticeably more than the original rate at 35 or 45. Each renewal also prices the whole next 10 years at once, so the rate has to cover the higher risk at the end of the new term, not just the start.

Is the renewal price a surprise, or was it in the contract?

On many renewable term policies, the renewal premiums are set out in the policy itself when you buy it, so the number on your notice isn't something the insurer invents at year 10. It's worth digging out your contract and looking for the renewal premium schedule before you decide anything.

Insurers also generally let you know before the date arrives. Speaking for the Canadian Life and Health Insurance Association (CLHIA), Ron Sanderson said that "typically, within 60–90 days of a premium renewal point, companies will send a letter to both the individual and the advisor," and that auto renewal is "an integral feature" of these long term policies (Wealth Professional, January 2018). That's a news report quoting CLHIA rather than an official CLHIA publication, and CLHIA's own consumer guide to life insurance is currently offline for review, so treat the timing as typical, not guaranteed.

Renewal usually doesn't require new health questions

This is the part people often miss. Renewing is expensive, but it's also protective. Canada Life's renewal page, as one example of how insurers describe it, says "you won't need to requalify or answer more health questions to maintain coverage," and that coverage renews automatically unless you tell them otherwise (Canada Life, Renew term life insurance).

If your health has changed in the last decade, that guaranteed renewal can be worth a lot. A brand new policy would mean fresh underwriting, and a new diagnosis could raise the price or make coverage harder to get.

Your main options at year 10

Most people end up choosing from a short list. Exact rules vary by insurer and contract, so check yours:

• Let it renew. You keep the same coverage with no new medical questions, at the higher renewal rate.
• Apply for a new term policy. If you're healthy, a fresh 10 or 20 year term at your current age may cost less than the renewal rate. It requires new underwriting, and a new policy generally starts fresh contestability and suicide clause periods.
• Convert to permanent coverage. Many term policies include a conversion privilege. Canada Life, for example, says you can convert "any time after the first anniversary of the policy and before it expires" without proving your health again. Permanent premiums are typically much higher than term, so this suits people with a lasting need, like final expenses or leaving an estate.
• Ask about reducing coverage. If your mortgage is smaller and the kids are older, you may need less. Ask your insurer whether your contract allows a lower amount at renewal.
• Let it lapse. FCAC notes that if you don't pay your premiums, "your insurance company may cancel your policy." Only do this on purpose, after confirming you no longer need the protection.

A practical checklist before your renewal date

A few steps make the decision much easier:

1. Find your policy and note the renewal date, the renewal premium and any conversion deadline.
2. Recalculate your need: remaining mortgage, years until the kids are independent, savings in your TFSA and RRSP, and any group coverage through work.
3. Be honest about your health. If anything has changed, don't cancel the old policy until a new one is approved and in force.
4. Compare the renewal cost against new term quotes and against converting part of the coverage.
5. Start a few months early, so you're not rushed into a default.

What this doesn't tell you

A few honest limits on everything above:

• No specific numbers for you. Renewal pricing depends on the insurer, your age, sex, smoking status, health class at issue and the exact product. Nothing here tells you what your renewal premium will be.
• Population data isn't insurance pricing. The Statistics Canada figures describe the whole BC population, not insured people, and insurers use their own experience and margins.
• Contracts differ. Not every term policy is renewable or convertible, conversion windows and maximum ages vary, and some products renew yearly rather than in 10 year blocks. Only your contract answers these questions.
• A cheaper new policy isn't always better. New coverage can be declined or rated, and it restarts the contestability clock. Sometimes paying more to renew is the sensible choice.
• Your need may have changed. Some people at year 10 need more coverage, not less, especially after buying a home in Vancouver or Coquitlam or having another child.

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

Sources

• Financial Consumer Agency of Canada. "Life insurance." Government of Canada, page modified 2025-10-16. https://www.canada.ca/en/financial-consumer-agency/services/insurance/life.html
• Statistics Canada. "Life tables, Canada, provinces and territories" (Table 13-10-0114-01, three year estimates, 2022/2024), released January 13, 2026. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1310011401
• Statistics Canada. "Life Tables, Canada, Provinces and Territories" (Catalogue 84-537-X), 2026. https://www150.statcan.gc.ca/n1/pub/84-537-x/84-537-x2025001-eng.htm
• Canada Life. "Renew term life insurance." https://www.canadalife.com/insurance/life-insurance/term-life-insurance/renew-term-life-insurance.html
• Wealth Professional. "Auto-renewal on term life there to protect consumers: CLHIA," quoting Ron Sanderson of the Canadian Life and Health Insurance Association, January 2018. https://www.wealthprofessional.ca/investments/life-and-health-insurance/auto-renewal-on-term-life-there-to-protect-consumers-clhia/236487

If your 10 year renewal is coming up, or you just want a second set of eyes on what you have, I'd be glad to help. As an independent broker based in Burnaby, I can compare renewal, new term and conversion options across Canada's major insurers, in English or Tagalog. Book a free, no pressure call and we'll look at it together.