- No cash value. Unlike permanent life insurance term life insurance policies don't accumulate cash value over time.
- No death benefit is paid if the insured person outlives the policy’s term period of 25 years unless the policy is renewed or converted.
Published on : April 8, 2025 | Reviewed by Catherine Malone
What is 25-year term life insurance and how does it work?
A 25-year term life insurance policy is a contract that ensures coverage and helps provide financial protection for a set period of 25 years. If the insured person dies within this 25-year timeframe, then the beneficiaries receive a tax-free lump sum payment called the death benefit. Your policy automatically renews after 25 years, unless you decide to end the policy or convert to another life insurance product.
Here's an overview of how these policies typically work:
Fixed Term
Active for 25 years from the policy’s start date.
Fixed Premiums
Your premiums (monthly or annual fees) remain the same for 25 years.*
Death Benefit
Amount paid to beneficiaries is fixed and known upfront. It won’t change.*
* The premiums and death benefit remain the same for the 25-year period provided your premiums are paid on time.
Benefits of 25-year term life insurance policies
Affordable
Offers affordable long-term coverage.
Covers Long-term Financial Obligations
Fixed premiums for budget planning.
Protection
Great for long-term financial obligations (e.g. a mortgage, children’s education, running a business, etc.)
Benefits of 25-year term life insurance
- Offers affordable long-term coverage.
- Fixed premiums for budget planning.
- Great for long-term financial obligations (e.g. a mortgage, children’s education, running a business, etc.)
Who should consider a 25-year term life insurance policy?
A 25-year term life insurance policy length is ideal for:
- Young parents who want coverage until their children are financially independent.
- Individuals with long-term debts, such as a 25-year mortgage.
- Those seeking affordable long-term coverage.
What happens when a 25-year term life insurance policy ends?
Before the 25-year term ends, you have several options. You can let the policy expire and buy a new life insurance policy (which would require a new application and underwriting). Or, depending on your current term policy, you may be able to:
- Renew for another term,
- Convert to a longer term life insurance policy (e.g. 30 years, 40 years), or
- Convert to a permanent life insurance policy.
Keep in mind, your premiums will likely rise when you renew or convert to another policy. Also, some term policies automatically renew for the same term length if no action is taken.
Application process for a 25-year term life insurance policy:
To obtain a 25-year term life insurance policy from Sun Life, you'll need to:
- Connect with an advisor.
- Complete an application form with personal and health information.
- Undergo a medical exam in some cases.
- Wait for underwriting approval.
Is a 25-year term life insurance policy right for you?
A 25-year term life insurance policy offers a balance between long-term protection and affordability. It provides peace of mind for a quarter-century, helping to ensure your loved ones are financially protected during crucial years. But as with any insurance product, it's important to consider all your financial needs and consult with an advisor to determine if this type of policy aligns with your overall financial strategy.
To find out which insurance policies (there may be more than one) meet your needs, connect with an advisor near you.
Additional resources
This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.