Mortgage Insurance vs. Life Insurance
If you have mortgage life insurance that you purchased through your lender there are some things you should be aware of. First of all mortgage life insurance tends to be more expensive than personal life insurance purchased through an independent life insurance broker. To give you a sense of the cost differences here are some sample comparisons of mortgage life insurance versus personal life insurance:
| Mortgage Amount – $250,000 |
20-Year Term Insurance[1] |
Average Cost For Traditional mortgage life insurance from banks[2] |
| Male, age 35, non-smoker |
$252.50 | $426.00 |
| Female, age 35, non-smoker |
$200.00 | $426.00 |
| Mortgage Amount – $250,000 |
20-Year Term Insurance[1] |
Average Cost For Traditional mortgage life insurance from banks[2] |
| Male, age 40, non-smoker |
$347.50 | $636.00 |
| Female, age 40, non-smoker |
$262.50 | $636.00 |
Personal life insurance offers the following other advantages over mortgage life insurance:
- You own the policy, not your lender.
- You choose your beneficiaries and they decide how the money is used.
- Your coverage is portable. No need to re-qualify if you change lenders.
- Your coverage remains the same, even as your mortgage decreases.
- You keep your coverage for as long as you need it provided the premiums are paid.
Click here to view the Mortgage Life Insurance Comparison Chart.
[1] Premiums shown are the annual premiums for first 20 years for healthy standard non-smoking life insureds with ages as indicated purchasing $250,000 of Empire Life Solution 20 as of February 15, 2018. At the end of each 20 year term, Solution 20 automatically renews and the premium increases. If the amortization period of the mortgage is greater than 20 years, annual renewal premiums of $3,475 for male age 35, $5,495 for male age 40, $2,322.50 for female age 35 and $4,140 for female age 40 will be required to continue the Solution 20 coverage beyond the first 20 years.
[2] The average costs for the traditional mortgage life insurance shown are based on the average premiums payable per year for the same individuals as above obtaining a $250,000 mortgage life insurance as determined by Empire Life in a survey conducted January 22, 2018 of Scotiabank ($450 for age 35; $660 for age 40), BMO ($390 for age 35; $600 for age 40), TD and Canada Trust ($510 for age 35; $720 for age 40) , RBC ($390 for age 35; $600 for age 40), and CIBC ($390 for age 35; $600 for age 40).