What this article covers
Term to 100 life insurance is the most straightforward permanent life insurance product available to Canadians and also the most confusingly named. This article explains why it is permanent despite being called “term,” what actually happens when the policyholder reaches age 100, the critical but underappreciated conversion use case, what the absence of cash value means in practical terms, and exactly who T-100 is and is not the right product for. It also shows where T-100 sits relative to the other three permanent products in this series.
This is Part 4 of a four-part series on permanent life insurance in Canada. Part 1 covers whole life insurance. Part 2 covers participating whole life insurance and how dividends work. Part 3 covers universal life insurance. Each article stands alone, but reading this series in order builds a complete picture of the permanent life insurance landscape in Canada.
If you have read the earlier articles in this series, you have encountered participating whole life and universal life, two products that combine permanent coverage with investment and accumulation components. Term to 100 life insurance is deliberately different. It strips all of that away. No investment account. No dividends. No cash surrender value. What remains is the core of what life insurance is actually for: a guaranteed benefit paid to the people you care about, for as long as you live, at a price that does not change. Understanding what that simplicity is worth, and what it costs you to achieve it, is what this article is about.
The naming paradox: why it is called “term” when it is permanent
Term to 100 life insurance is a permanently confusing product name. In every other context in Canadian insurance, “term” means temporary: term life insurance is bought for 10, 20, or 30 years and expires. When someone hears “term to 100” for the first time, the reasonable assumption is that coverage expires when the policyholder turns 100.
That assumption is wrong. A term to 100 life insurance policy is a permanent life insurance product. The word “term” in the name refers to the premium payment period, not the coverage duration. You pay premiums until age 100. Coverage lasts for your entire life.
Why the name exists: a brief product history
Term to 100 life insurance emerged in Canada in the 1980s as insurers looked for a way to offer permanent coverage at a price point between term life (inexpensive but temporary) and whole life (permanent but expensive with a cash value component). The product design is simple: take the mortality cost of insuring a life from the current age to age 100, spread it into level annual premiums, remove all investment and cash value mechanics, and you have a permanent product that costs less than whole life because it promises less.
The “term to 100” label reflects the pricing structure: the contract is essentially a term policy with a 100-year term length. Because most people do not live to 100, the insurer prices premiums at a level that is affordable for the coverage period while building enough reserve to pay the death benefit when it occurs. If the policyholder does reach age 100, premiums stop entirely and coverage continues for life at no further cost.
This is a uniquely Canadian product design. The CLHIA’s life and health insurance overview identifies Term to 100 life insurance as a distinct permanent product category within the Canadian market. It is not offered in the same form in the United States, where the permanent insurance market developed differently, making T-100 a product that is specific to the Canadian regulatory and pricing environment. The product exists in Canada because of the regulatory and pricing environment that made it commercially viable here.
How term to 100 life insurance actually works
The mechanics of T-100 are straightforward by design. Understanding the three core elements helps you evaluate whether the product fits your situation.
The most important thing T-100 does not have
Term to 100 life insurance typically has no cash surrender value. The FCAC’s guide to life insurance confirms that unlike whole life products, Term to 100 does not include a savings component. This is its defining trade-off and the primary reason it costs less than whole life or universal life for the same death benefit. There is no investment account, no savings component, and no amount paid to the policyholder if the policy is cancelled or surrendered. If you stop paying premiums, you lose your coverage and receive nothing in return.
This is not a flaw. It is a deliberate design choice that makes the product simpler and less expensive. The absence of cash value means the insurer does not need to maintain a separate investment fund for each policy, does not need to guarantee a minimum return, and does not need to manage the tax implications of policy withdrawals. All of that cost is removed, and the premium reflects it.
One important nuance
Not all T-100 products are identical in their cash value treatment. Some insurers, including RBC Insurance, note that a portion of the premium earns interest that is not taxable while it remains in the policy. This suggests a very modest internal reserve that accumulates tax-deferred within the policy. However, this is not a meaningful cash surrender value in the way whole life’s cash value is structured. Before purchasing any T-100 policy, ask the insurer directly what, if anything, is available upon surrender. For most T-100 products, the answer is nothing.
What happens at age 100
The age-100 feature is one of the most asked-about aspects of T-100 and one of the least clearly explained. Here is the precise answer.
If you reach your 100th birthday while your policy is in force, two things happen simultaneously. First, your premium obligation ends. You will never be asked for another payment. Second, your coverage does not end. The death benefit remains in place, guaranteed, for the rest of your life at no further cost. Your beneficiaries will still receive the full death benefit when you die, whether that is at 100, 107, or 112.
The reason this works mechanically is that the level premium structure was calculated to fund the eventual death benefit over the payment period from issue to age 100. By the time you reach 100, the insurer has held and invested your premiums for decades. The internal reserve is sufficient to continue funding the benefit without further premium income. This is standard actuarial practice for long-duration insurance products.
The Financial Consumer Agency of Canada’s guide to life insurance explains that permanent life insurance products are designed to remain in force for the policyholder’s entire life as long as premium obligations are met, and that coverage terms beyond age 100 vary by insurer and product. Always confirm the specific post-100 treatment in your policy contract.
The five life insurance products at a glance: where T-100 fits
The clearest way to understand a Term to 100 life insurance product is to see it in context alongside every other life insurance product. This table covers the full spectrum from temporary to permanent.
Canadian life insurance products compared
Non-smoking female, age 40, $500,000 coverage. Approximate 2025 market rates.
| 20-year term | Temporary | None | $45 – $70 | Simple |
| Term to 100 (T-100) | Permanent | None (or minimal) | $280 – $400 | Simple |
| Non-par whole life | Permanent | Yes, guaranteed | $380 – $520 | Moderate |
| Participating whole life | Permanent | Yes + dividends | $500 – $700 | Complex |
| Universal life (level cost) | Permanent | Yes, self-directed | $350 – $500+ | Most complex |
Sources: Ratehub · PolicyMe · insurer rate benchmarks · CLHIA product framework. Rates are approximate and vary by health profile, insurer, and province. T-100 is highlighted because it occupies the cost and complexity position that makes it useful for a specific category of buyer.
T-100’s position in that table is its defining characteristic: permanent coverage at a cost that sits below every other permanent product, achieved by removing the cash value component entirely. It is the least expensive route to a guaranteed lifetime death benefit in Canada.
The conversion use case: the most underappreciated feature of T-100
One of the most important real-world applications of Term to 100 life insurance in Canada is the one that almost no article explains clearly: the conversion of an expiring term policy by a policyholder whose health has changed.
The conversion scenario: how T-100 protects the uninsurable
Consider a Canadian who purchased a 20-year term life policy at age 40. At 58, approaching the end of their term, they are diagnosed with a health condition that would make them uninsurable in a standard underwriting process. Their term policy is expiring. They cannot qualify for new coverage at any price through normal channels.
Most Canadian term life policies include a conversion privilege: the right to convert the term policy to a permanent product offered by the same insurer, without a new medical examination, up to a specified age (typically 65 to 70). The CLHIA’s consumer guide to life and health insurance identifies the conversion privilege as a standard feature of Canadian term life policies. The conversion is granted purely on the basis of insurability at the time of the original policy issue, not the policyholder’s current health status.
Term to 100 life insurance is one of the most commonly available products for this conversion. The policyholder converts their expiring term policy to a T-100 policy for the same or a similar face amount, pays the T-100 premium rate based on their current age, and maintains permanent life insurance coverage they could not otherwise obtain.
This is T-100 at its most valuable: not as an estate planning tool purchased from scratch, but as the permanent coverage safety net for a policyholder whose health has taken away their other options. According to TD Insurance’s guide to T-100, term policies can be converted to a Term to 100 life insurance policy without requiring evidence of good health, making this feature available at any point during the conversion window regardless of the policyholder’s current medical status.
The conversion window matters
The right to convert a term policy to T-100 is time-limited. Most policies specify a conversion deadline, typically the policy anniversary before the insured turns 65 or 70, depending on the insurer and policy terms. If a policyholder develops a health condition after the conversion window closes, the conversion right is lost. Review your term policy’s conversion deadline before it passes. If you are within the conversion window and your health has changed materially, the decision about whether to convert should be made with a licensed advisor, not deferred. The FCAC’s consumer guide to life insurance advises Canadians to review all policy features, including conversion rights, as part of an annual insurance review.
The surrender risk: what the absence of cash value really means
Most articles mention that T-100 has no cash value in passing. Few explain what that means concretely for a policyholder who can no longer afford the premiums or who changes their mind about the coverage.
With a participating whole life policy, if you surrender the policy after 15 or 20 years of premium payments, you receive the accumulated cash surrender value. That value is real and meaningful. It represents years of premium contributions, investment returns, and dividend accumulation. Surrendering is a financial transaction with a defined payout.
With T-100, surrender produces nothing. Every premium you have paid since the policy was issued was used to fund the cost of insurance for that year and to build the insurer’s reserve for the eventual death benefit. There is no accumulation account to return to you. If you stop paying premiums, your coverage lapses and you lose everything you have contributed above the cost of insurance over the years.
This is not a reason to avoid T-100, but it is a reason to be certain before you buy. T-100 is a commitment, not an investment. The value it delivers is the guaranteed death benefit it will eventually pay. If that benefit is no longer needed, the product has no residual value. This is precisely why the needs analysis must come before any T-100 purchase decision. The DIMEF calculator is a useful starting point for determining whether you have a permanent financial obligation that justifies a permanent product like T-100.
T-100 for joint coverage: the last-to-die structure
Term to 100 life insurance can be purchased as joint coverage covering two lives under a single policy. Two structures are available, and the choice between them matters significantly for estate planning purposes.
Joint T-100 coverage structures
Two lives, one policy: different payout timing
T-100 vs participating whole life: choosing between the two
For a Canadian who has determined they have a genuine permanent life insurance need, T-100 and participating whole life are the two most likely candidates. They both provide permanent coverage. They are both simpler than universal life. And they serve many of the same estate planning purposes. The choice between them is not obvious and deserves a clear explanation.
Feature
Term to 100 (T-100)
Participating Whole Life
| Cash value | None (or minimal) | Yes, grows with a guaranteed rate and dividends |
| Death benefit growth | Fixed for life | Grows over time through paid-up additions |
| Premiums | Level to age 100, then free | Level for life (Life Pay) or for a fixed period (10-Pay, 20-Pay) |
| Relative cost | Lower: no cash value to fund | Higher: cash value accumulation and dividend infrastructure add cost |
| Surrender value | None for most products | Meaningful cash surrender value after 10 to 15 years |
| Tax-sheltered growth | No: there is nothing to shelter | Yes: cash value grows tax-deferred inside exempt policy |
| Management required | None: set and genuinely forget | Minimal: periodic dividend option reviews |
| Best use case | Fund a fixed permanent obligation with no growth needed | Fund a growing estate tax liability or build tax-efficient wealth alongside permanent coverage |
The decision rule is simple: if your permanent need is a fixed, known liability, T-100 is sufficient and more affordable. If your permanent need involves a growing obligation, or if tax-sheltered wealth accumulation alongside permanent coverage is an objective, participating whole life delivers more but costs more.
The practical example
Robert and Patricia from Part 1 of this series needed to fund a $170,200 capital gains tax liability on their Muskoka cottage. That liability is fixed because the cottage is already purchased. A joint last-to-die T-100 policy for $200,000 addresses the need precisely at lower cost than participating whole life. If instead the cottage continued to appreciate and the capital gains liability was expected to grow significantly before their deaths, participating whole life with a paid-up additions dividend election would make more sense, as the growing death benefit from PUAs would track the growing liability more closely. The nature of the need determines the product.
