Term 20

Term 20 vs Bank Mortgage Life

 

Term 20

Bank Mortgage Life

Premiums

Gtd level for 20 years, gtd.

Gtd Renewable to age 85.

Market competitive.

Gtd Level for duration of mortgage

Not guaranteed renewable.

Often 2X the price of Term 20.

Coverage

Gtd level for duration of policy

Decreases as mortgage is paid down

Cancellation

Non-cancellable by insurance company

Most banks have a full page of conditions where they can cancel your policy.

Underwriting

Underwritten at time of application.

Underwriting done at time of claim.  Errors found at that time can lead to denied claims.

Policy owner

You

The bank

Beneficiary

Your choice

The bank

Convert to permanent (no medical exam required)

Yes

No

Provincial Sales tax on premiums

No

Yes

About Term 20

What happens if you become uninsurable?

With term insurance,prior to age 65 you can exchange your policy for a permanent, lifetime policy – no medical exam required. With bank mortgage life insurance, your coverage is cancelled when you switch mortgage providers. Therefore if you become uninsurable and switch mortgage companies you will lose your life insurance coverage.

Term 20 premiums increase every 20 years.

Bank mortgage life insurance premiums increase to your new older age every time you switch mortgage providers.

Term 20 coverage can be maintained up to age 85.

Term 20 life insurance can also be exchanged for a lifetime policy prior to age 65 – without a medical exam.

Mortgage life insurance ceases when you pay off your mortgage.

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