How to Stop Overpaying in 4 Simple Steps
Switching from bank mortgage life insurance to independent term life is straightforward. Here's exactly how it works.
Step 01
Calculate Your Overpayment
Use our free calculator to see exactly how much your bank is charging you vs. what you'd pay for independent term life insurance. Enter your age, mortgage details, and see the difference instantly.
Step 02
Get Free Term Life Quotes
Submit your details to receive 3 no-obligation quotes from independent, licensed Canadian life insurance brokers. They work for you, not the bank.
Step 03
Get Approved for Term Life
Apply for your chosen term life policy. You'll go through full medical underwriting upfront — which means once approved, your coverage is guaranteed. No post-claim surprises.
Step 04
Cancel Your Bank Insurance
Once your term life policy is active, call your bank and cancel their mortgage life insurance. You'll start saving immediately — typically $35-50/month that goes back in your pocket.
Frequently Asked Questions
Everything you need to know about switching from bank to independent insurance.
Can I cancel my bank's mortgage life insurance at any time?
Yes. Bank mortgage life insurance is optional and can be cancelled at any time. Your mortgage terms are not affected. Make sure you have your new term life policy in place before cancelling.
Is this the same as CMHC/Sagen default insurance?
No. CMHC/Sagen default insurance is required if your down payment is less than 20% — it protects the lender if you can't make payments. Mortgage LIFE insurance is a completely separate product that pays out if you die. That's what this site is about.
What is post-claim underwriting and why is it bad?
Post-claim underwriting means the insurance company doesn't fully review your health when you apply. Instead, they review it after you die and file a claim. If they discover a pre-existing condition you didn't disclose (even accidentally), they can deny the claim — leaving your family with nothing after years of premium payments.
Why is term life insurance cheaper than bank mortgage insurance?
Several reasons: (1) Term life is sold in a competitive market, while banks have a captive audience at mortgage signing. (2) Banks add significant markup since they know you're focused on the mortgage, not shopping around for insurance. (3) Bank insurance uses post-claim underwriting which is cheaper for them but riskier for you.
What if I have a pre-existing health condition?
With term life, you'll know upfront whether you're approved and at what rate. If you have conditions that make traditional term life expensive, your broker can explore options like simplified issue policies. Either way, you'll know your coverage status before you start paying — unlike bank insurance where you only find out at claim time.
Do I need to tell my bank I have separate life insurance?
No. Your bank has no say in your life insurance choices. Mortgage life insurance offered by the bank is always optional, regardless of what the mortgage specialist may imply. You are never required to purchase insurance through your lender.
How long does it take to get term life insurance?
Most applications take 2-6 weeks for full underwriting. Some insurers offer accelerated underwriting that can approve you in days. Your broker will guide you through the process and help you time the switch so there's no gap in coverage.
What happens to my coverage if I switch banks or refinance?
With bank mortgage life insurance, you lose your coverage and have to reapply (at your current, older age). With independent term life, nothing changes — your policy stays exactly the same regardless of what happens with your mortgage or lender.
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