See how level, decreasing (mortgage) and increasing term coverage track, or drift from, the need it is meant to protect.
Applies to increasing term only, capped at 150% of the initial face amount.
How this works. A term policy's death benefit can hold steady, shrink, or grow over the
years you are covered. Level term pays the same face amount whenever death occurs: simple, but you
may end up over- or under-insured as your needs change. Decreasing term shrinks alongside a falling
debt; banks sell it as "mortgage insurance" because the amount at risk is the outstanding mortgage, which amortizes
down over time. Increasing term grows (e.g. 5% a year, capped at 150% of face) for needs expected to
rise with inflation or income. The amber line is the outstanding mortgage: where the blue benefit line sits above it
you are over-insured for that debt, and where it sits below you are under-insured.
Educational illustration of standard Canadian insurance concepts. Figures are illustrative, not an insurer’s rates.
Illustration only, not a quote or advice. Figures are simplified for education and do not
reflect any specific insurer's rates. Consult a licensed advisor.