{"id":34169,"date":"2026-02-25T14:41:19","date_gmt":"2026-02-25T19:41:19","guid":{"rendered":"https:\/\/silver.rbcinsurance.com\/en-ca\/?p=34169"},"modified":"2026-02-25T14:41:20","modified_gmt":"2026-02-25T19:41:20","slug":"term-vs-universal-life-insurance-difference-2","status":"publish","type":"post","link":"https:\/\/silver.rbcinsurance.com\/en-ca\/discover-share\/life-insurance\/term-vs-universal-life-insurance-difference-2","title":{"rendered":"Term vs. Universal Life Insurance in Canada: What\u2019s the Difference?"},"content":{"rendered":"\n<div class=\"wp-block-rbc-template-selector templateSelector template__article articleSingle\" data-template=\"article\">\n<div class=\"wp-block-group articleSingle__container tabListStickyWrapper is-layout-flow wp-block-group-is-layout-flow\">\n<div class=\"wp-block-group articleSingle__container__hero is-layout-flow wp-block-group-is-layout-flow\">\n<div class=\"wp-block-group articleSingle__container__hero__inner is-layout-flow wp-block-group-is-layout-flow\">\n<span class=\"rbc-yoast-breadcrum-span\"><span><a href=\"https:\/\/silver.rbcinsurance.com\/en-ca\/\">Home<\/a><\/span><\/span>\n\n\n\n<div class=\"wp-block-group articleSingle__featuredImage__group is-layout-flow wp-block-group-is-layout-flow\">\n<div class=\"wp-block-group articleSingle__title__group is-layout-flow wp-block-group-is-layout-flow\"><h1 class=\"wp-block-post-title\">Term vs. Universal Life Insurance in Canada: What\u2019s the Difference?<\/h1>\n\n\n<div class=\"wp-block-group articleSingle__date__group is-layout-flow wp-block-group-is-layout-flow\"><div class=\"wp-block-post-date\"><time datetime=\"2026-02-25T14:41:19-05:00\">February 25, 2026<\/time><\/div>\n\n\n<span class=\"wp-block-rbc-html-element articleSingle__readTime\">11 Min Read<\/span>\n<\/div>\n\n\n\n<div class=\"wp-block-group articleSingle__author__group is-layout-flow wp-block-group-is-layout-flow\">\n<img decoding=\"async\" src=\"https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/uploads\/sites\/2\/2021\/06\/Avatar.webp?quality=80&w=128&h=128&crop=1\" alt=\"Joshua Bonnici\">\n\n\n\n<div class=\"wp-block-group articleSingle__author__details is-layout-flow wp-block-group-is-layout-flow\">\n<span class=\"wp-block-rbc-html-element articleSingle__author__name\">Joshua Bonnici<\/span>\n\n\n\n<span class=\"wp-block-rbc-html-element articleSingle__author__designation\"><\/span>\n<\/div>\n<\/div>\n<\/div>\n\n\n<figure class=\"articleSingle__featuredImage wp-block-post-featured-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/uploads\/sites\/2\/2021\/06\/Term-vs-Universal-Life-Insurance.webp?quality=80&amp;w=1024\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"Term vs Universal Life Insurance\" style=\"object-fit:cover;\" srcset=\"https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/uploads\/sites\/2\/2021\/06\/Term-vs-Universal-Life-Insurance.webp 1024w, https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/uploads\/sites\/2\/2021\/06\/Term-vs-Universal-Life-Insurance.webp?resize=300,200 300w, https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/uploads\/sites\/2\/2021\/06\/Term-vs-Universal-Life-Insurance.webp?resize=768,512 768w, https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/uploads\/sites\/2\/2021\/06\/Term-vs-Universal-Life-Insurance.webp?resize=412,275 412w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group articleSingle__container__main is-layout-flow wp-block-group-is-layout-flow\">\n<div class=\"wp-block-group articleSingle__container__page__nav is-layout-flow wp-block-group-is-layout-flow\">\t\t<div class=\"socials-block\">\n\t\t\t\t\t\t<p class=\"socials-block-title\">\n\t\t\tShare this article\t\t<\/p>\n\t\t<div class=\"social-links mob-mar-b-hlf mob-mar-t-hlf\">\n\t\t\t\t\t<a class=\"social-button-wrapper sharing-custom sharing-email\" href=\"mailto:?subject=Term vs. Universal Life Insurance in Canada: What\u2019s the Difference? &#038;body=Hi, I thought you might be interested in this article from RBC Insurance: https:\/\/silver.rbcinsurance.com\/en-ca\/discover-share\/life-insurance\/term-vs-universal-life-insurance-difference-2\">\n\t\t\t\t<img decoding=\"async\" src=\"https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/plugins\/rbc-blocks\/assets\/img\/icons\/icon-email.svg\"\n\t\t\t\talt=\"envelope icon\">\n\t\t\t\t<span>\n\t\t\t\tEmail\t\t\t\t<\/span>\n\t\t\t<\/a>\n\t\t<div class=\"social-button-wrapper sharing-copy-wrapper\">\n\t\t\t<button class=\"sharing-custom sharing-copy\" data-url=\"https:\/\/silver.rbcinsurance.com\/en-ca\/discover-share\/life-insurance\/term-vs-universal-life-insurance-difference-2\">\n\t\t\t<img\n\t\t\t\tsrc=\"https:\/\/silver.rbcinsurance.com\/en-ca\/wp-content\/plugins\/rbc-blocks\/assets\/img\/icons\/icon-related.svg\"\n\t\t\t\talt=\"copy icon\">\n\t\t\t<span id=\"sharing-copyUrl-Label\">\n\t\t\t\tCopy URL\t\t\t<\/span>\n\t\t\t<\/button>\n\t\t\t<input type=\"text\" class=\"sharing-copy-text\" aria-labelledby=\"sharing-copyUrl-Label\">\n\t\t<\/div>\n\t<\/div>\n  \t\t<\/div>\t\n\t\t\n\n\n<div class=\"wp-block-rbc-tabs-list tabsList\" data-switch=\"lgBp\" data-target-heading=\"h2\"><p class=\"tabsList__heading\">On this page<\/p><div class=\"tabsList__wrapper\"><button class=\"selectDropdown__button\" aria-haspopup=\"listbox\" aria-expanded=\"false\"><span class=\"selectDropdown__title\">How universal life insurance works<\/span><span class=\"selectDropdown__chevron\"><\/span><\/button><ul class=\"tabsList__items selectDropdown__list\"><li class=\"selectDropdown__list__item tabsList__item selected\"><a href=\"#h-how-universal-life-insurance-works\">How universal life insurance works<\/a><\/li><li class=\"selectDropdown__list__item tabsList__item \"><a href=\"#h-how-term-life-insurance-works\">How term life insurance works<\/a><\/li><li class=\"selectDropdown__list__item tabsList__item \"><a href=\"#h-difference-between-universal-life-vs-term-life-insurance\">Difference between universal life vs. term life insurance<\/a><\/li><li class=\"selectDropdown__list__item tabsList__item \"><a href=\"#h-is-term-life-insurance-better-than-universal-life-insurance\">Is term life insurance better than universal life insurance?<\/a><\/li><li class=\"selectDropdown__list__item tabsList__item \"><a href=\"#h-get-the-right-life-insurance-policy-for-your-needs\">Get the right life insurance policy for your needs<\/a><\/li><li class=\"selectDropdown__list__item tabsList__item \"><a href=\"#h-faqs-about-term-vs-universal-life-insurance\">FAQs about term vs. universal life insurance<\/a><\/li><\/ul><\/div><\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group articleSingle__content__main tabListHeadings is-layout-flow wp-block-group-is-layout-flow\">\n<section class=\"wp-block-rbc-section-block  pos-rel\" style=\"border-radius:0px\">\n<div class=\"wp-block-rbc-section-inner-block  section-inner \" style=\"border-radius:0x\">\n<p>Life insurance is one of those things most Canadians know they <em>should<\/em> have \u2014 but fewer feel confident explaining. And once you start comparing term vs. universal life insurance, it can feel less like a financial decision and more like a pop quiz you didn\u2019t study for. Both are legitimate life insurance products, both can protect your family, and both get recommended a lot. The catch? These products are built for very different jobs.<\/p>\n\n\n\n<p>This article breaks down how term and universal life insurance work in Canada, how they differ in cost, flexibility, and purpose, and the situations where each one can make the most sense.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-key-takeaways\">Key takeaways<\/h3>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Term life insurance and universal life insurance serve different purposes. Term life is designed for affordable, time-limited protection, while universal life is meant for lifelong coverage with added flexibility and tax-advantaged features.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Term life insurance<\/strong> is often the simplest and most affordable way to protect your family during key financial years, like while you have a mortgage or a young family to support.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Universal life insurance<\/strong> is generally more complex, but also more flexible. It can include a savings component that grows on a tax-deferred basis and may support long-term goals like estate planning or business succession.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>The right choice depends on your goals, budget, how long you need coverage, and how involved you want to be in managing the policy.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Your needs can change over time. Many Canadians start with term life insurance and later consider permanent options as their financial situation evolves.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-universal-life-insurance-works\">How universal life insurance works<\/h2>\n\n\n\n<p>Universal life insurance is a type of permanent life insurance, designed for Canadians who want lifelong coverage that can help protect their income during their working years, leave behind a legacy, and build additional value for their estate. When you pass away, it pays a tax-free death benefit to your beneficiaries.&nbsp;<\/p>\n\n\n\n<p>Universal life insurance also includes a tax-advantaged savings component that can grow inside the policy over time. How this works is a portion of what you pay goes toward the cost of insurance, which is the minimum amount needed to keep the policy in force. If you choose to pay more than the minimum amount, the extra dollars can go into a savings portion that may grow on a tax-deferred basis, as long as it stays inside the policy.<\/p>\n\n\n\n<p>Depending on the insurer, you can usually choose how that savings portion is invested and how your premiums are paid. For example, with universal life insurance, you can select from different interest options and choose between plans with or without bonus interest. That built-in flexibility can be helpful if your income, priorities, or long-term plans change over time.<\/p>\n\n\n\n<p>Learn more about <strong><a href=\"https:\/\/silver.rbcinsurance.com\/en-ca\/discover-share\/life-insurance\/what-is-permanent-life-insurance-and-how-does-it-work\/\" data-dig-id=\"LP-LifeInsurance-34169-f4429931\" data-dig-label=\"permanent life insurance\" data-dig-action=\"link click\" data-dig-category=\"LP-LifeInsurance\" class=\"rbc-link-format\">permanent life insurance<\/a>.<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Key features of universal life insurance<\/h3>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Lifetime coverage:<\/strong> Coverage is designed to last your entire life, rather than a set term.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Tax-free death benefit:<\/strong> Your beneficiaries will receive a lump sum, tax-free benefit if you pass away.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Premiums: <\/strong>You\u2019re not locked into one fixed payment for a term. As long as you stay within required minimums and maximums, you can adjust how much you contribute and how often you pay (e.g., monthly or annually). Paying more than the minimum can also help build value inside the policy over time.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Broad range of investments<\/strong>: Depending on the insurer, you can choose from different interest or market-linked options and adjust those choices over time if your comfort level or goals change.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Tax-deferred growth:<\/strong> Growth is not taxed while it remains in the policy.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Access to funds<\/strong>. If savings have built up, you can typically access the cash value through withdrawals or policy loans. The policy can also be surrendered for its cash value, although accessing funds may affect coverage and taxes.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Built-in flexibility:<\/strong> Premium amounts, payment timing, and investment choices can often be tweaked as your income or priorities change.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Living benefits:<\/strong> Some policies may offer living benefits, such as a compassionate advance if you become terminally ill or a disability benefit paid from the policy\u2019s accumulated value.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Riders:<\/strong> Extra coverage can often be added to suit your needs, such as a children\u2019s term rider, accidental death benefits, or supplemental term insurance.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-term-life-insurance-works\">How term life insurance works<\/h2>\n\n\n\n<p>Term life insurance is designed to be simple and affordable. It provides coverage for a set term (e.g., 10, 20, 40 years), and if you pass away during that time, your beneficiaries receive a tax-free death benefit.<\/p>\n\n\n\n<p>You pay a monthly or annual premium for the length of the term you choose. If the term ends and you\u2019re still alive, coverage typically ends or can be renewed at a higher cost, depending on the policy.<\/p>\n\n\n\n<p>Term life insurance is most often used for income replacement and temporary protection, such as covering a mortgage or supporting your family while children are still financially dependent. It doesn\u2019t include a savings or investment component, so there\u2019s no cash value \u2014 premiums go entirely toward coverage, which is why it\u2019s often a more affordable option.<\/p>\n\n\n\n<p>That said, some insurers like RBC Insurance may allow you to convert all or part of your term life insurance policy into a permanent policy later.<\/p>\n\n\n\n<p>Learn more about <strong><a href=\"https:\/\/silver.rbcinsurance.com\/en-ca\/discover-share\/life-insurance\/what-is-term-life-insurance-2\/\" data-dig-id=\"LP-LifeInsurance-34169-f4429931\" data-dig-label=\"term life insurance and how it works\" data-dig-action=\"link click\" data-dig-category=\"LP-LifeInsurance\" class=\"rbc-link-format\">term life insurance and how it works<\/a>.&nbsp;<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Key features of term life insurance<\/h3>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Affordable coverage<\/strong>: With RBC Insurance, rates can start at less than $13\/month, depending on your age, health, coverage amount, and term length.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Tax-free death benefit.<\/strong> If you pass away during the term, your beneficiaries receive a tax-free lump sum payment. With RBC Insurance, the amount generally ranges from $50,000 up to $25 million.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Set terms and premiums: <\/strong>Coverage lasts for a defined period \u2014 commonly between 10 and 40 years \u2014 with premiums that stay the same for the length of the term. Policies can often be renewed at the end of the term, typically at a higher cost.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Flexibility:<\/strong> Term life insurance lets you match coverage to specific needs, such as replacing income or covering a mortgage. Many policies also allow you to add riders or convert some or all of your coverage to permanent life insurance later on.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Simple by design<\/strong>: There\u2019s no cash value and no investing \u2014 just straightforward protection for the years you need it most.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-difference-between-universal-life-vs-term-life-insurance\">Difference between universal life vs. term life insurance<\/h2>\n\n\n\n<p>Universal life insurance and term life insurance both provide protection \u2014 they just go about it in different ways. Here\u2019s a simple, side-by-side look at how they compare.<\/p>\n\n\n\n<div class=\"wp-block-rbc-basic-tables basicTables\">\n<div class=\"wp-block-rbc-basic-table basicTable\"><div class=\"basicTable__sliderNav\" role=\"navigation\" aria-label=\"Table navigation\"><div class=\"basicTable__navArrow basicTable__prevArrow\" aria-label=\"Previous\"><\/div><div class=\"basicTable__sliderDots\" role=\"tablist\" aria-label=\"Table pagination\"><\/div><div class=\"basicTable__navArrow basicTable__nextArrow\" aria-label=\"Next\"><\/div><\/div><table class=\"basicTable__table\" role=\"table\" aria-label=\"Comparison table\">\n<thead class=\"wp-block-rbc-basic-table-head basicTableHead\" role=\"rowgroup\" aria-label=\"Table head\">\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<th class=\"wp-block-rbc-basic-table-header basicTableHeader\" role=\"columnheader\" scope=\"col\">\n<h4 class=\"wp-block-heading\" id=\"h-feature\">Feature<\/h4>\n<\/th>\n\n\n\n<th class=\"wp-block-rbc-basic-table-header basicTableHeader\" role=\"columnheader\" scope=\"col\">\n<h4 class=\"wp-block-heading\" id=\"h-universal-life-insurance\">Universal Life Insurance<\/h4>\n<\/th>\n\n\n\n<th class=\"wp-block-rbc-basic-table-header basicTableHeader\" role=\"columnheader\" scope=\"col\">\n<h4 class=\"wp-block-heading\" id=\"h-term-life-insurance\">Term Life Insurance<\/h4>\n<\/th>\n<\/tr>\n<\/thead>\n\n\n\n<tbody class=\"wp-block-rbc-basic-table-body basicTableBody\" role=\"rowgroup\" aria-label=\"Table body\">\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Purpose<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Lifelong coverage, with the option to build savings for long-term or estate planning.<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Temporary coverage to protect income and family expenses.<\/p>\n<\/td>\n<\/tr>\n\n\n\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Premiums<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Flexible. You can adjust payments within limits.<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Fixed. Payment stays the same for the entire term.<\/p>\n<\/td>\n<\/tr>\n\n\n\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Duration<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Designed to last your whole life.<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Coverage lasts for a set term, like 10, 20, or 40 years.<\/p>\n<\/td>\n<\/tr>\n\n\n\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Complexity<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>More hands-on. Includes choices around funding and investments and may need monitoring over time.<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Simple. Fewer decisions and little ongoing involvement.<\/p>\n<\/td>\n<\/tr>\n\n\n\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Death benefit<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Pays a death benefit to your beneficiaries. Amount depends on how the policy is structured.<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Pays a set death benefit if you pass away during the term.<\/p>\n<\/td>\n<\/tr>\n\n\n\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Savings component<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Yes. Part of the policy can grow inside it on a tax-deferred basis.<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>No.<\/p>\n<\/td>\n<\/tr>\n\n\n\n<tr class=\"wp-block-rbc-basic-table-row basicTableRow\" role=\"row\">\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Access to funds<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>Yes, possible in some cases (loans or withdrawals from the policy\u2019s value).<\/p>\n<\/td>\n\n\n\n<td class=\"wp-block-rbc-basic-table-data basicTableData\" role=\"cell\" aria-label=\"Table cell\">\n<p>No.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-is-term-life-insurance-better-than-universal-life-insurance\">Is term life insurance better than universal life insurance?<\/h2>\n\n\n\n<p>The short answer: neither is term life or universal life insurance \u201cbetter\u201d across the board. Term life insurance and universal life insurance are built for different goals, different timelines, and different comfort levels.<\/p>\n\n\n\n<p>The right choice depends on what you\u2019re trying to protect, how long you need coverage, and whether you\u2019re looking for straightforward protection or a longer-term planning tool. For many Canadians, the \u201cbetter\u201d option is simply the one that fits their life right now \u2014 and that can change over time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a><\/a>Why universal life insurance might be right for you<\/h3>\n\n\n\n<p>Universal life insurance can make sense if you\u2019re looking for more than just basic protection. It\u2019s often a better fit for people who:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Want lifelong insurance coverage that doesn\u2019t expire.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Are interested in tax-advantaged growth inside a life insurance policy.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Have a higher income and may already be maximizing other registered savings options.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Are thinking about estate planning, leaving a legacy, or covering future tax obligations.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Own a business and need help with business succession, shareholder planning, or key person protection.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Are comfortable with a policy that requires some ongoing attention and decision-making.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Like the idea of having a built-in cash value you can leverage if your plans change or a new opportunity arises.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p>In short, universal life insurance tends to suit people who see life insurance as part of a broader financial or estate plan \u2014 not just a safety net.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Why term life insurance might be right for you<\/h3>\n\n\n\n<p>Term life insurance is often the right choice if your goal is clear, time-bound protection. It\u2019s commonly a good fit for people who:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Want a simple, affordable way to protect their family.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Need coverage during a specific age and stage, such as while paying a mortgage or raising children.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Are focused on income replacement, not building savings inside an insurance policy.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Prefer something that\u2019s easy to understand and easy to manage.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Want the flexibility to reassess their needs later or convert to permanent insurance down the road.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p>Term life insurance may work well when your biggest financial responsibilities are temporary, and when keeping costs predictable matters. If you\u2019re leaning toward term life insurance, you don\u2019t need to guess what it might cost.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-get-the-right-life-insurance-policy-for-your-needs\">Get the right life insurance policy for your needs<\/h2>\n\n\n\n<p>At the end of the day, choosing between term life insurance and universal life insurance isn\u2019t about picking the \u201cbest\u201d product \u2014 it\u2019s about choosing what works for <em>your<\/em> <em>life<\/em>. Term life insurance may make sense if you want affordable, no-frills coverage for a set period. Universal life insurance can be a better fit if you\u2019re thinking long-term and want flexibility around estate or tax planning. If you\u2019ve got questions, a licensed insurance advisor can help. A quick conversation can go a long way in clarifying your options and making sure the coverage you choose matches your goals and your budget.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs-about-term-vs-universal-life-insurance\">FAQs about term vs. universal life insurance<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><a><\/a>What are alternatives to purchasing universal or term life insurance?<\/h3>\n\n\n\n<p>Term and universal life insurance aren\u2019t the only options available to Canadians. Other types include whole life insurance (lifelong coverage with built-in savings), guaranteed life insurance (often no medical exam, but generally higher costs and lower coverage), and term-to-100 life insurance (coverage to age 100 with fixed premiums and a tax-free death benefit). Each option serves a different need and budget.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a><\/a>What is the difference between term insurance, whole life insurance, and universal life insurance?<\/h3>\n\n\n\n<p>The main differences between term insurance, whole life insurance, and universal life insurance come down to how long coverage lasts and whether there\u2019s a savings component.<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Term life insurance<\/strong> covers you for a set period and focuses on affordability.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Whole life insurance<\/strong> provides lifelong coverage with guaranteed premiums and built-in savings.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Universal life insurance<\/strong> also offers lifelong coverage, but with more flexibility around premiums and how savings are managed.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p>Generally, all three pay a tax-free death benefit but are designed for different goals.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><a><\/a>Can I switch from term life insurance to permanent life insurance?<\/h3>\n\n\n\n<p>In many cases, yes, you can switch from term life to permanent life insurance. Some term life policies allow you to convert part or all of your coverage to permanent life insurance (such as whole or universal life). Conversion options and timelines vary by policy, so it\u2019s a good idea to review the details or speak with a licensed insurance advisor.<\/p>\n\n\n\n<div class=\"wp-block-rbc-rbc-default-collapsible\"><p><button class=\"collapse-toggle collapsed\" data-target=\"#collapse2de7ba0a\" data-toggle=\"collapse\" aria-expanded=\"false\" aria-controls=\"collapse2de7ba0a\" data-dig-id=\"LP-10384-2de7ba0a\" data-dig-category=\"LP\" data-dig-action=\"accordion closed\" action-closed=\"accordion closed\" action-opened=\"accordion open\" data-dig-label=\"Things Our Lawyers Want You to Know\"><div>Things Our Lawyers Want You to Know<\/div><\/button><\/p><div class=\"collapse-content collapse\" id=\"collapse2de7ba0a\">\n<div class=\"wp-block-rbc-collapsible-inner-block collapse-inner\">\n<p class=\"has-text-sm-font-size\">*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.<\/p>\n\n\n\n<p class=\"has-text-sm-font-size\">This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.<\/p>\n<\/div>\n<\/div><\/div>\n\n\n\n\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Term life and universal life insurance are two different types of life insurance that  that serve specific needs. Here\u2019s what Canadians need to know about how they differ.<\/p>\n","protected":false},"author":208,"featured_media":34131,"comment_status":"open","ping_status":"open","sticky":false,"template":"templates\/new-rbci-design.php","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[54],"tags":[4],"article-type":[88],"ppma_author":[169],"class_list":["post-34169","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-life-insurance","tag-life-insurance","article-type-discover-share"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Term vs. Universal Life Insurance in Canada: What\u2019s the Difference? | RBC Insurance<\/title>\n<meta name=\"description\" content=\"Term life and universal life insurance are two different types of life insurance that that serve specific needs. Here\u2019s what Canadians need to know about how they differ.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Term vs. Universal Life Insurance in Canada: What\u2019s the Difference? | RBC Insurance\" \/>\n<meta property=\"og:description\" content=\"Term life and universal life insurance are two different types of life insurance that that serve specific needs. 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