Key takeaway
BMO life insurance is typically 20–40% more expensive than independent carriers like Desjardins, Empire Life, or iA Financial for identical term coverage. The convenience of bundling with your bank rarely justifies the premium difference. However, BMO's creditor insurance can be useful as temporary bridge coverage during mortgage closing.
BMO term life insurance rates vs independent carriers
BMO's term life rates are consistently higher than independent carriers. A 35-year-old non-smoker seeking $500K of 20-year term coverage can expect to pay $40–$55/month through BMO, compared to $25–$38/month from Desjardins or Empire Life. That premium difference compounds to $3,600–$6,120 over 20 years for identical coverage.
The reason for higher pricing is distribution cost: BMO sells through bank branches and online direct channels, which carry higher overhead than independent broker distribution. Independent insurers pass those savings to policyholders through lower premiums.
BMO creditor insurance (mortgage insurance)
BMO offers creditor life insurance at mortgage closing, which pays off your mortgage balance if you die. This is typically the most expensive way to get life insurance — premiums stay level while coverage decreases as your mortgage is paid down.
A standalone term life policy from an independent carrier costs less, provides more coverage, is portable (stays with you if you switch lenders), and the beneficiary is your family rather than the bank. The only advantage of BMO creditor insurance is speed — it can be arranged at mortgage closing without a separate application process.
When BMO insurance makes sense
BMO insurance is worth considering if you have a complex health profile that would be declined by independent carriers — BMO's group plans may offer guaranteed acceptance with no medical questions. It can also work as temporary bridge coverage while a fully underwritten independent policy is being processed.
For most healthy Canadians, however, independent carriers through a broker or comparison platform will provide better value. The same coverage for 20–40% less cost is a significant savings over a 10–30 year policy term.
Frequently asked questions
Is BMO life insurance expensive?
Yes, compared to independent carriers. BMO term life rates are typically 20–40% higher than Desjardins, Empire Life, or iA Financial for identical coverage. Over 20 years, this can mean paying $3,600–$6,120+ more for the same protection.
Should I get life insurance through my bank?
Generally no. Independent carriers offer lower rates, portable policies, and more product options. Bank insurance may be useful for guaranteed acceptance group plans or temporary bridge coverage, but most Canadians get better value from independent providers.
Is BMO mortgage insurance worth it?
BMO mortgage (creditor) insurance is rarely the best option. A standalone term policy from an independent carrier is cheaper, provides level coverage (instead of decreasing), names your family as beneficiary, and stays with you if you change banks.