Key Takeaways

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.

[fs-toc-omit]Differences Between COLI vs BOLI

You may have heard the acronyms, BOLI and COLI being thrown around recently, leading you to wonder, when did you get so behind on the newest slang words?

Don't worry though, these trendy acronyms are actually stand for Corporate-Owned Life Insurance (COLI) and Bank-Owned Life Insurance (BOLI). Most banks do offer life insurance policies for their customers. Before you seal the deal with your bank, it is important to understand what you are signing up for when purchasing a bank-owned life insurance policy.

Luckily, you're in the right place. We'll make it simple so you can see which one suits your business best.

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.

This article focuses on the other meaning of "bank-owned life insurance": personal life insurance that Canadians can buy from a bank.

[fs-toc-omit]What's the best bank-owned life insurance in Canada?

[fs-toc-h2]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.

How much does term life insurance cost in Canada?

PolicyMe	Premiums
Female	$27.83
Male	$37.39

Compare to PolicyMe's term life insurance policies. Pricing is based on a 40-year-old non-smoking applicant looking for $500K in coverage for a 15-year term policy.

Check Your Price

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.

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.

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).

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.

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.

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.

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.

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

[fs-toc-omit]Best non-BOLI Alternative: PolicyMe

[fs-toc-h2]Bank-owned life insurance alternatives

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.

[fs-toc-omit]Canadian bank-owned life insurance: pros & cons

[fs-toc-h2]Pros and cons of bank life insurance

Pros of buying life insurance from a bank

Incentives: Sometimes, they offer special deals, like lower prices on other products. But make sure it'sworth itand that the policy meets your needs.
In-person experience: You can meet advisors in person if they have brick-and-mortar locations.

Cons of buying life insurance from a bank

Limited options: Banks may not have policies that match your needs. (i.e. the term lengths, coverage, or guaranteed issue products you want).
Pressure to buy: You might be pressured to buy insurance that isn't suitable or is pricier than needed because agents work on commission.
Less personalized: An independent insurance agent or financial advisor would dedicate more energy to choosing the right policy from the right company.
Advisor turnover: Most banks in Canada have a high rate of turnover, so you lose your point of contact if your advisor leaves.
Fragmented experience: YYou might think it's "easier" to use one bank for all your financial needs. But departments are often siloed because of company size and compliance.

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.

[fs-toc-omit]How do you buy life insurance through a bank?

[fs-toc-h2]How to buy coverage from a bank

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.

Take note

Banks only provide quotes and options for their own life insurance products. By working with an independent financial professional, you can get access to multiple providers so that you can compare rates for bank-owned life insurance.

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.

[fs-toc-omit]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, and not just your bank! 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 is a policy that a company takes out on the life of an owner, key employee, or partner. The business is the beneficiary, meaning if the insured person passes away, the company receives the payout. This money can be used to cover losses, settle debts, or even buy out the deceased's shares in the company. It's a smart way for Canadian businesses to protect themselves from unexpected disruptions and financial strain, especially when key individuals are critical to the company’s success.

In Canada, business-owned life insurance can also be a tax-efficient way to manage company finances. Premiums are typically paid with after-tax dollars, but the death benefit is usually tax-free for the business. This type of insurance isn't just for big corporations; even small and medium-sized businesses can benefit from the financial security it provides. It’s a practical tool that helps ensure your business can weather the unexpected and continue to thrive, no matter what happens.

Rates pulled from Compulife ® software for comparable policies to PolicyMe’s term life product. Features may vary based on selected policy and provider.

You need facts, not fluff. Our goal is to provide you with honest, trustworthy information to help you make informed decisions. While our content is created with insurance experts, it is for educational purposes only and should not be considered definitive professional financial advice.

We recommend seeking the counsel of a licensed financial advisor before making any decisions regarding insurance or personal finance.

PolicyMe's editorial guidelines

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/