Mortgage Life Insurance Cost Calculator

by Glenn Cooke

04/19/21

Transcript

Welcome to our channel on mortgage life insurance. My name is Glenn Cooke and I’m with Only Insurance. In this video we’re going to compare mortgage life insurance costs from the big 5 banks in Canada.

A number of things before we get started. 

First, rather than building an entire calculator to dynamically display the banks premiums, I’ve calculated them by hand and I’ll be stepping you through various ages in table format instead. It’s just a lot quicker that way, and you can still get a good sense as to what premiums will look like for your situation.

Secondly, the premiums I’ve used are based on published premiums as of January 1, 2021. They may change over time, though mortgage life insurance costs are pretty static so it’s unlikely they’ll be changed in the short term.

Next, instead of showing ages 25, 30, 35, and so on, we’re using ages of 25, 31, 36 and so on. That’s because mortgage life insurance premiums usenon-intuitive age ranges and these ages we’ve selected better fit the ranges used by the banks. 

And lastly, we’ve also added in the premium for a 20 year term life insurance policy so you can compare that as well. In all cases 20 year term insurance is the least expensive of the bunch. And while we are quoting males for the purposes of this video, appreciate that females will get even cheaper term 20 premiums. That’s not the case with mortgage life insurance which uses unisex pricing. 

Quote prices of banks vs term life now

For a deeper look at mortgage life insurance vs term life insurance, please check out our other videos where we’ve gone into depth on this subject..

In all cases we’re assuming a Male Nonsmoker for $500,000 of coverage. So, without further ado, here we go:

Age 25,
bank premiums range from $40 to $65 per month. 
20 year term life insurance is available for $32/month.

Age 31,
bank premiums range from $65 to $85 per month. 
20 year term life insurance is available for $32/month.

Age 36,
bank premiums range from $65 to $120 per month. 
20 year term life insurance is available for $36/month.

Age 41,
bank premiums range from $100 to $165 per month. 
20 year term life insurance is available for $53/month.

Age 46,
bank premiums range from $200 to $225 per month. 
20 year term life insurance is available for $85/month.

Age 51
bank premiums range from $260 to $320 per month. 
20 year term life insurance is available for $146/month.

Age 56,
bank premiums range from $350 to $410 per month. 
20 year term life insurance is available for $267/month.

Still Have Questions?

We have insurance experts available to answer all your questions.

One last comment about the premiums, RBC in particular looks to be cheaper than the other banks at some of the younger ages. This is because their age groupings are off by one year from the other banks so this idiosyncracy is only for those specific ages we’ve shown. Add or subtract one more year of age to these comparisons and RBC will be much more in line with the other banks.

You can see that 20 year term life insurance premiums are substantially cheaper than bank mortgage life insurance. In addition to the term life insurance premiums being less expensive, the $500,000 of death benefit remains level. By contrast mortgage life insurance coverage starts at $500,000 and goes down as you pay down the mortgage.

If you’d like to consider term life insurance to protect your mortgage, visit mortgageinsurance.ca. There you can get custom quotes for term life insurance, quote critical illness coverage, and apply online when you’re ready to proceed. You can go there now by clicking on the mortgageinsurance.ca logo at the bottom of this video.

Thanks for watching, and we’ll see you next time.