Best Bank-Owned Life Insurance in Canada

Peer reviewed by
Javade Williams
,
Licensed Life Insurance Advisor

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In This Article

Key takeaways:

  • Life insurance can be purchased via a bank, an insurance company, a broker or insurtech companies like PolicyMe.
  • Canadians often buy life insurance from a bank if they already have accounts with one of the top providers like BMO, RBC or TD.
  • Banks may upsell/oversell you on life insurance when you buy another product (i.e. mortgage), because their insurance agents are commissioned.
  • Bank-owned life insurance is sometimes also called corporate life insurance and business-owned life insurance.

What is bank-owned life insurance (BOLI)?

  • Bank-owned life insurance (BOLI) has two meanings: a policy banks buy to insure an employee or a personal life insurance policy bought from a bank.
  • BOLI that banks buy is used to offset employee compensation and benefits costs, like health and life insurance and pension plans.
  • BOLI that a person buys from a bank to provide a tax-free death benefit (payout) to a person's family if they pass.

What is corporate life insurance (COLI)?

  • Corporate life insurance (COLI) is life insurance purchased by a bank or a corporation.
  • COLI is used for insurance on key employees at the corporation, like a boss or a founder. Just like regular life insurance, it's a financial safety net, but in this case, it's for the company instead of a family.
  • COLI is also called corporate-owned life insurance and business-owned life insurance.

What's the best bank-owned life insurance in Canada?

The best bank-owned life insurance in Canada is RBC if you're looking at affordability. But that's just one consideration; the best option depends on your specific needs.

For starters, here are rates for term life insurance from bank-owned insurance compared to PolicyMe.

best bank owned life insurance - company rate comparison

Here's a look at the top bank-owned life insurance companies with quotes (for a 34-year-old non-smoking man, coverage for $500,000 over 20 years):

BMO life insurance: best for stability

Takeaway: BMO has a wide range of life insurance policies, which is good for customers that want options. But compared to other providers, there are more medical requirements at the time of application.

More info about BMO life insurance

Sample quotes

  • $32.40 per month for term life insurance
  • $283.16 per month for universal life insurance

Expert opinion on BMO life insurance

“BMO is a reputable, established brand. But the caveat here is that they may not put a particular product focus on insurance, so you may not get specialized advice.”

Philippe Charbonneau, Licensed Insurance Advisor

» Read the full BMO life insurance review

Canada Life insurance: best for participating policies

Takeaway: Canada Life has the largest participating fund in Canada, sitting at $49B (compared to Sun Life's $16B and Manulife's $13B.) This makes them a viable choice for participating permanent life insurance. 

More info about Canada Life insurance

Sample quotes

  • $32.90 per month for term life insurance
  • Quotes for participating are not available without an advisor call.

Expert opinion on Canada Life insurance

“Because of the sheer size of Canada Life as a company, you may feel like you're just a number as a customer. You may not feel like your service is personalized.”

— Philippe Charbonneau, Licensed Insurance Advisor

» Read the full Canada Life insurance review

CIBC: limited life insurance options

Takeaway: CIBC only has term lengths of 10 and 20 years. There's an option to convert your policy to a Term 100 plan (a type of permanent coverage).

More info about CIBC life insurance

Sample quotes

  • $45.17 per month for term life insurance

Expert opinion on CIBC life insurance

“Life insurance is not their current focus as a business, so it might be tricky to get custom, specialized advice from them.”

Javade Williams, Licensed Insurance Advisor

Desjardins: good range of life insurance products

Takeaway: Desjardins has a variety of life insurance products you'd expect most insurance companies to have, including term and permanent life insurance options.

More info about Desjardins life insurance

Sample quotes

  • $31.50 per month for term life insurance

Expert opinion on Desjardins life insurance

“Desjardins has a dedicated insurance division. In comparison, their insurance products are better developed and advisors are better trained.”

— Javade Williams, Licensed Insurance Advisor

» Read the full Desjardins life insurance review

Manulife life insurance: best for combined insurance

Takeaway: Manulife has a host of insurance products: term life insurance, permanent life insurance, universal life insurance, etc. They also have the option to combine insurance policies.

More info about Manulife life insurance

Sample quotes

  • $32.62 per month for term life insurance
  • $195.75 per month for life, critical illness and disability insurance

Expert opinion on Manulife life insurance

“Synergy is certainly an interesting product, but the payout is comboined. So that means if you use your critical illness or disability coverage, you may have nothing left to provide your family as a death benefit.”

— Philippe Charbonneau, Licensed Insurance Advisor

» Read the full Manulife life insurance review

RBC life insurance: best for term life options

Takeaway: RBC is the highest revenue bank in Canada. Their term life insurance options are quite wide-ranging, with rates that can be pretty competitive.

More info about RBC life insurance

Sample quotes

  • $31.23 per month for term life insurance

Expert opinion on RBC life insurance

“RBC's term policies are renewable and convertible. As a company, they focus on the young professional crowd, so they keep prices relatively competitive.”

— Philippe Charbonneau, Licensed Insurance Advisor

» Read the full RBC life insurance review

Scotiabank: only available to Scotiabank customers

Takeaway: Scotiabank life insurance is only sold to existing banking customers. They generally have less expertise in the insurance space.

More info about Scotiabank life insurance

Sample quotes

  • $31.50 per month for term life insurance

Expert opinion on Scotiabank life insurance

“They have a full department to upsell insurance to existing customers. There's not a lot of focus on customer education on what their policy actually entails.”

— Javade Williams, Licensed Life Insurance Advisor

Best bank-owned life insurance alternative: PolicyMe

Takeaway: PolicyMe is a Canadian insurtech company that offers affordable term life insurance, with a no-brainer online application process. Here's why you might consider PolicyMe over a bank:

  • Affordable: Premiums are between 5 to 20 per cent cheaper than other insurance solutions on the market in Canada.
  • Fast and simple: Apply online in 20 minutes or less. We've streamlined the risk assessment process so you get the same quality coverage, just faster!
  • Honest advice: Our experienced insurance advisors can give you personalized advice via phone or email, without pushy upselling.
  • Responsive: Get an email response in one business day (versus three-plus days for a big bank). And an advisor is often available to take calls immediately.
  • Backed by giants: PolicyMe is backed by federally-regulated insurance giant Canadian Premier.

Canadian bank-owned life insurance: pros & cons

Buying life insurance through a bank may not be the best option for everyone. Need some pointers? Here are some examples of what an advisor can help with:

  • Getting honest advice so you aren't over- or under-insured
  • Saving money by getting only the coverage you need, nothing more
  • Learning how to apply and what to expect during the process
  • Understanding the 101 of life insurance (eg. choosing beneficiaries, term vs. perm, making a claim)
  • Deciding whether or not you need couples life insurance

The bottom line? Our advisors read the fine print so you don't have to.

How do you buy bank-owned life insurance in Canada?

There are two main ways to buy life insurance from a bank in Canada — either from the insurance division of the bank or an independent insurance broker.

How to get the best life insurance from a bank in Canada

Let's get into some tips to get the best banked-owned life insurance Canada has to offer.

  • Financial health: It's important to choose a financially stable bank for your life insurance policy. For the most part, major banks are in good standing.
  • Underwriting: When applying, insurance providers will ask you questions to determine your "risk" level, which impacts your premiums. Some providers have more complex processes than others.
  • Application and policy delivery: To speed up approval, choose a bank that lets you apply and get your documents online. This way, you won't be at the mercy of snail mail or need to physically go into the bank.
  • Price: Don't assume that a lower price means the bank is untrustworthy or shady. It may just be pricing policies more competitively to attract customers.

FAQ: Canadian bank-owned life insurance (BOLI) 

Where can I purchase life insurance?

You can purchase life insurance policies from a few key sources in Canada. These include financial institutions such as insurance companies, insurtech companies, brokers and banks.

Insurance companies are a popular place, offering a wide range of policies, including term, universal and permanent life insurance. Banks also offer life insurance policies, but their selection is limited and they may not be able to give you the personalized attention you need. Ultimately, the best place to buy life insurance depends on your needs and budget.

What is business-owned life insurance?

Business-owned life insurance, also known as corporate-owned life insurance (COLI), is a life insurance policy that a company purchases on the lives of key employees, with the company being the policyholder and beneficiary.

Business-owned life insurance can also serve as a tax-efficient risk management strategy for the company, providing insurance coverage for key employees. The company pays the premiums for the insurance policy. Upon the passing of the insured employee(s), the company receives tax-free death benefits (or insurance proceeds), which can further enhance the company's risk management and financial stability.

Want to learn more about other life insurance options? Here are more reviews of Canadian life insurance companies:

Our sources:

Background research and fact-checking by Jordan Rodrigues, licensed life insurance specialist at PolicyPlan.ca have been pulled from a subject matter expert interview conducted in 2023. All reviews were fact-checked and updated with new information.

Term Life Insurance Quote Online | TD Insurance. (n.d.). https://www.tdinsurance.com/products-services/life-insurance/quote/en#!/

WinQuote®. (n.d.). https://www.winquote.net/

Laura McKay

COO & Co-Founder
About the Author

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