Canada Life Mortgage Insurance: 2024 review + free quotes
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Discover the methodologyConsidering how to protect your family's home in case the unexpected happens? Canada Life mortgage insurance offers a reassuring solution, allowing you to secure your dream home.
With affordable policies designed to cover your mortgage to your lender if you're no longer around, Canada Life stands as a beacon for Canadian homeowners seeking financial security.
In this review, we take a look at Canada Life mortgage insurance, its benefits, costs, and how it can safeguard your family's future. Use our free tool to get personalized quotes from Canada Life and compare them with quotes from other providers right here.
Canada Life Mortgage Insurance: 4 Key Takeaways
- Canada Life underwrites several mortgage protection insurance providers
- Canada Life mortgage insurance premiums start from $0.05 per $1,000 of insured mortgage loan
- Automatic approval is readily available for policies where the total insurance coverage is <$300,000
- You must have a current mortgage policy to be eligible for Canada Life mortgage insurance
Our Canada Life mortgage insurance review: Reliable and affordable protection
Canada Life is arguably one of, if not the largest private mortgage life insurance providers in Canada. Founded in Ontario in 1847, they became the country's first domestic life insurance provider and have since grown to assist Canadians in all aspects of their insurance needs.
Canada Life mortgage insurance is one of the company’s many strengths, underpinned by the fact that it underwrites all the creditor and mortgage insurance policies for numerous financial institutions in Canada, such as BMO, CIBC, RBC, Scotia Bank mortgage insurance, TD Life Insurance Company.
While online reviews regarding the company’s claims and customer service leave you wanting, Canada Life’s product versatility and coverage stand out.
With premiums starting as low as $0.05 per $1,000 of insured mortgage, automatic approval for coverage under $300,000, and a transparent claim process, it simplifies protecting your family's home.
The flexibility to spread out payments and a generous upper benefit limit of $500,000 make it a comprehensive and accessible option for many Canadians, reinforcing its position as a top provider in the country.
If you think Canada Life could the a good choice for you, you can get a personalized quote right here. Click the button below and get free quotes tailormade for you.
Below you’ll find the advantages and disadvantages of Canada Life’s mortgage insurance plans.
Pros of Canada Life Mortgage Insurance
- Monthly premiums are transparent and start from $0.05 per $1,000 of insured mortgage
- Automatic approval can guarantee immediate coverage
- You won’t start paying any premium until the mortgage is made available to you by the lender
- The claim process is straightforward with a short timeline
- Canada Life employees, representatives, and clients with Canada Life investment products receive a 5% discount.
- Has a high upper benefit limit of $500,000
Cons of Canada Life Mortgage Insurance
- Premiums are not guaranteed and are renewed every 10 years
- Claims have to be submitted within 60 days of the insured’s passing
- May not be suitable for individuals needing coverage above $500,000
If you think mortgage life insurance might be something for you, don’t hesitate to use our comparison tool to compare policies from Canada’s best insurance providers.
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What does Canada Life mortgage insurance cover?
Canada Life mortgage insurance covers your financial obligations towards your mortgage provider if you, or your joint assured pass away before the age of 70.
Specifically, the policy will pay the full balance of your insured mortgage loan to the lender at the time of your death, up to the maximum limit of $500,000. Canada Life will also cover a maximum of 60 days of interest that may be accrued by the mortgage from the date of death and the settlement of the claim.
If a mortgage exceeds $500,000, the payable benefit by Canada Life’s mortgage insurance will be calculated by:
- Taking the overall insured mortgage amount; and,
- Dividing it by the total loan as it were at the insurance effective (start) date; and,
- Multiplying the result with the current outstanding mortgage at the time of passing.
Example: Coverage exceeding $500,000
If your Canada Life mortgage insurance coverage is $500,000 on a mortgage loan of $600,000 and when the insured passes away the outstanding mortgage balance is $300,000, the final payable benefit will equal $249,000.
This is calculated as $500,000÷$600,000 = 0.83 x $300,000 = $249,000.
When does Canada Life mortgage coverage begin?
Canada Life mortgage insurance starts immediately if your answers are ‘No’ to all of the medical questions on the application form and the requested mortgage life insurance coverage is no more than $300,000. This immediate inception of the policy is called automatic approval.
Where you don't get auto approval, your Canada Life mortgage insurance start date will be the later date of:
- When you signed the insurance application
- When Canada Life announces the approval of your application; or,
- The date when the mortgage funds are sent to you
This process ensures that you are not liable for any mortgage payments, nor will you accrue any interest until your coverage is guaranteed and the insured funds are available for your use.
Watch out!
Make sure that your answers to the medical questions on the insurance application are correct and accurate because any failure to declare important information may result in the retroactive cancellation of your policy!
How much does Canada Life mortgage insurance cost in 2024?
Canada Life mortgage insurance costs vary depending on several factors and no two premiums will be alike. Fortunately, Canada Life’s mortgage insurance premium rates are publicly available through their product booklets, in addition to transparent instructions on how to calculate the monthly premium.
Canada Life’s mortgage insurance premiums are calculated by:
- Taking the total mortgage
- Multiplying it with the applicable premium rate based on age and smoking status as shown in the table below
- Dividing the final number by 1,000; and,
- Adding provincial taxes (if any)
- Deduct a 5% discount for Canada Life employees, representatives, and Canada Life investment product clients
The table below shows Canada Life’s monthly premium rate per $1,000 of insured mortgage for smoking and non-smoking, single, or joint-insured individuals.
| Age | Single, Non-smoker | Joint, Non-Smokers | Single, Smoker | Joint, Smokers |
|---|---|---|---|---|
| Under 30 | 0.05 | 0.07 | 0.11 | 0.15 |
| 30-34 | 0.07 | 0.10 | 0.14 | 0.20 |
| 35-39 | 0.11 | 0.15 | 0.24 | 0.34 |
| 40-44 | 0.18 | 0.25 | 0.38 | 0.53 |
| 45-49 | 0.29 | 0.41 | 0.60 | 0.84 |
| 50-54 | 0.43 | 0.60 | 0.88 | 1.23 |
| 55-59 | 0.54 | 0.76 | 1.12 | 1.57 |
| 60-64 | 0.63 | 0.88 | 1.34 | 1.88 |
You must get exact quotes based on your unique needs and budget. You can do it right here by clicking the button below. Get free personalized quotes from Canada Life right now.
Example: Premium calculation
A 36-year-old non-smoker with no medical concerns applies for Canada Life’s mortgage insurance wanting coverage for a $300,000 mortgage. This person should get automatic approval and their premiums, before any applicable tax, would be $33/month.
Unlike term life insurance, Canada Life mortgage insurance premiums are not guaranteed for life. After 10 years of uninterrupted cover, the monthly premium will be recalculated with the insured’s new age, smoking status, and insured portion of the mortgage.
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Good to know
Is your down payment less than 20%? You must take High Ratio Mortgage Insurance (HRMI). HRMI, like CMHC mortgage insurance, is mandatory for most conventional mortgages with a down payment below 20%. This is because lenders consider such loans riskier due to the borrower's smaller stake in the property. Read our guide on High Ratio Mortgage Insurance to understand how it works.
What are Canada Life mortgage insurance exclusions and limitations?
Just like any insurance policy, Canada Life mortgage insurance comes with a list of limitations and exclusions that should be understood before opting for their policy. While most, if not all of these regulations are similar for all insurance products of the same nature, they may make you reconsider the coverage in its entirety, or look for other policies that may slightly differ.
One of the most important limitations of Canada Life’s mortgage insurance is that the amount of insurance coverage will never exceed $500,000 for any one mortgage loan, or any one insured borrower. This means that one person cannot be insured for mortgages that have a combined value of over $500,000.
There are, however, no limitations on how many mortgage loans they can insure; i.e. one person could theoretically insure 5 mortgage loans valued at $100,000 each.
Specific exclusions to the policy which will result in no benefit being paid include:
- Misstatement on application form: This includes concealment and misrepresentation of false declarations.
- Suicide: Death resulting from suicide within two years from the insurance effective date, or two years from when an increase in the insured amount has occurred.
- Simultaneous deaths: Where joint insureds pass away at the same time, only one death benefit is paid.
- Misstatement of age: If the insured misstates their age on the application and has not been eligible for cover had their true age been declared, then a full refund will be returned and no benefit be paid.
Good to know
While Canada Life offers comprehensive coverage, you must compare other plans like Cumis Mortgage Insurance, Scotia Bank Insurance, and Sun Life among others before zeroing in on it.
How to make a Canada Life mortgage insurance claim?
While claiming a Canada Life mortgage insurance policy is straightforward, you have to be aware of the 60-day time limit. When the insured passes away, the surviving family or friends have to notify Canada Life of the insured’s passing within 60 days of the passing date with proof of loss, such as a death certificate.
Individuals can also contact Canada Life’s Mortgage Servicing Centre to report the claim by calling the toll-free number 1-888-335-4433 or faxing the company at 1-866-686-3996. Canada Life will provide its claim decision 30 days after receiving all documents needed to process the claim.
Appealing a claim decision
If the claim outcome is not satisfactory, the claimants can appeal the decision at any time by writing to Canada Life and outlining the reasons for the appeal. It should be noted, however, that any costs to provide further evidence that may be needed to support the claim, such as additional medical evidence or reports, will be borne by the claimants.
You must send the written appeal and any supporting documentation via mail, email, or fax to the details highlighted below.
| Contact medium | Contact details |
|---|---|
| The Canada Life Assurance Company Creditor Insurance, Claims Department 330 University Avenue, Toronto OM, M5G1R8 | |
| [email protected] | |
| Secure fax | 1-866-891-7894 |
How to cancel your Canada Life mortgage insurance?
You can cancel your Canada Life mortgage insurance policy at any time by sending a written request to Canada Life Mortgage Servicing Centre, 2001 Robert-Bourassa Boulevard, Suite 2000, Montreal, QC H3A 2A6.
Like with most insurance policies, Canada Life’s mortgage insurance also has a free look period of 30 days from the insurance start date, where you can change your mind and receive a full refund of any premiums already paid.
When your insurance coverage ends
Your Canada Life mortgage insurance will also automatically at the earliest date when one of the following occurs:
- Mortgage is paid in full
- Canada Life receives your written cancellation request
- When you turn 70 years old
- If the loan is transferred to another creditor or assumed by another person
- If you have any insurance premiums 31 days overdue
- When the insured part of the mortgage is paid by Canada Life
- If the mortgage is renegotiated
What is the Canada Life Mortgage Insurance contact number?
Canada Life’s mortgage insurance contact details are:
- Phone number 1-800-665-1972 or 1-800-380-4572
- Email address [email protected]
