20-year term life insurance (T20) has several advantages for homebuyers who want to protect their future mortgage payments should misfortune strike. The cost of T20 is a middle ground between 10-year term life insurance (T10) and 30-year term life insurance (T30).
According to our sources who contributed to the special report on term life insurance published in the July 2026 edition of the Insurance Journal, T20 is significantly less expensive than mortgage insurance offered by banks.
“For young adults aged 25 to 40, 20-year term life insurance is almost half the price of mortgage insurance from financial institutions,” says Stéphanie Corbeil, CEO of the premium comparison website Assure Direct and Vice-President of SoumissionAssuranceVie.ca, an independent, fully digital personal and group insurance firm headed by Michel Landry, in an interview with the Insurance Portal.
Corbeil specifies that the 30-to-40 age group is her company’s largest market segment.
In the July 2026 edition of the Insurance Journal, Andrew Ostro, CEO of PolicyMe, commented on a recent snapshot of his clients’ term life insurance choices. Ostro co-founded the company with Laura McKay and Jeffrey McKay, PolicyMe’s Chief Operating Officer and Chief Technology Officer, respectively.
Based in Toronto, PolicyMe sells term life, critical illness, and health and dental insurance directly online across Canada. Securian Canada underwrites the risk and claims for the insurance products designed and sold by PolicyMe. PolicyMe also uses Blue Cross Life as an insurance product provider, while RGA Canada is its reinsurance partner.
In an interview with the Insurance Portal, Ostro outlined the key findings of his survey: his term life insurance customers aged 18 to 40 most often purchased term life insurance coverage of $500,000. PolicyMe obtained this information from over 18,000 policyholders.
He clarified that PolicyMe does not sell mortgage insurance. “However, many of our customers who purchase traditional term life insurance from us have a mortgage,” he noted. Like Stéphanie Corbeil, Andrew Ostro contends that individual term life insurance is less expensive than mortgage insurance from banks.
To demonstrate this, Ostro shared with the Insurance Portal a comparative pricing analysis of his product against mortgage insurance offered by lending institutions. The chosen scenario: a 35-year-old non-smoking woman requesting $500,000 in insurance coverage.
- PolicyMe's monthly premium for a 20-year term life insurance policy: $22.93
- A bank's monthly premium for mortgage life insurance: $75.09
PolicyMe bases its comparison on the average monthly premium of three major banks, whose names Andrew Ostro declined to disclose. Contacted randomly for a quote, TD Bank's banking subsidiary, TD Insurance, could only provide an approximate cost for mortgage insurance. According to their representative, clients can only find out the applicable rate for each situation at the branch. Furthermore, they emphasized that their rating does not differentiate between the insured's gender.
We asked the TD Insurance representative how much mortgage insurance would cost approximately for each member of a couple on a $500,000 loan. Each is 35 years old and a non-smoker. Each benefits from a 20% couple discount offered by TD.
- Individual monthly premium with discount: $68.29
- Individual monthly premium without discount, according to our calculations: $85.36
On the mortgage insurance section of its website, RBC Insurance states that unlike life insurance, which may require a medical exam, applying for mortgage insurance is simple. Both Stéphanie Corbeil and Andrew Ostro believe this simplicity comes at a price. Insurers' more rigorous risk pricing allows them to offer insurance at better prices than banks. RBC Insurance makes no secret of this. "Mortgage protection insurance may end up costing you more compared to standalone life, critical illness, or disability insurance policies, especially for younger, healthy adults," reads its website.
The insurer adds that the death benefit decreases as the insured pay down their mortgage. “If your mortgage starts at $400,000, but only $25,000 remains when you die, that is the amount that will be covered,” RBC Insurance explains.
The insurer acknowledges that life insurance is more flexible than mortgage insurance because it allows the beneficiary to use the death benefit "as needed." It mentions that mortgage loan insurance "is paid directly to your lender, removing any flexibility to direct the funds elsewhere."
For most people, it doesn't make sense to buy insurance tied to the amount of their mortgage.
– Andrew Ostro
According to Andrew Ostro, this is why most people would prefer to buy individual term life insurance from an insurer, rather than mortgage insurance from the bank. "For most people, it doesn't make sense to buy insurance tied to the amount of their mortgage. They should buy a life insurance policy to cover both their current needs and their mortgage needs," he says.
Much less expensive than a T30
In the July issue of the Insurance Journal, in an article on term life insurance, Stéphanie Corbeil noted that in her work, the T20 is the most popular option among 25- to 40-year-olds who want to cover their mortgage.
In an interview with the Insurance Portal, Corbeil explained that the T20 is significantly less expensive than the T30. She summarized the comments of several clients for whom she compared the prices of the two products: “Why would I pay $12, $13, or $30 more per month to guarantee coverage for another 10 years, when in 20 years my mortgage balance will have been cut in half?”
She also underlined the advantage of multi-life policies, also known as “multi-insured” policies, compared to joint life insurance payable upon the first death. She illustrates this advantage with the hypothetical case of a couple consisting of a 29-year-old non-smoking woman and a 33-year-old non-smoking man, who each want $500,000 in coverage.
For a few dollars more, the surviving spouse receives a $500,000 death benefit and remains insured for $500,000.
– Stéphanie Corbeil
In this example, it will cost this couple $6.75 more per month to purchase a multi-life policy rather than a joint policy payable upon the first death. “For a few dollars more, the surviving spouse receives a $500,000 death benefit and remains insured for $500,000. They don’t have to reapply for insurance,” explains Corbeil
According to the following two scenarios she provided, single individuals can also protect their mortgage at a reasonable price with individual term life insurance. The hypothetical cases presented are those of a 30-year-old woman and a 30-year-old man, each choosing a coverage amount of $250,000. The price is compared based on different policy terms and whether or not they smoke.
Corbeil declined to disclose the names of the insurers used to generate the various pricing scenarios she developed for this article on the Insurance Portal.
A search of the InsuranceINTEL database, the product information centre of the Insurance Journal Publishing Group, reveals that some insurers do not offer term life insurance policies for multiple insureds. This is the case, among others, for BMO Insurance, Foresters Financial, Humania Assurance, Manulife, and UV Insurance.
Others impose restrictions. For example, Canada Life only offers joint term life insurance payable upon the first death. Additional insured persons may be accepted on an exceptional basis, explains information provided by the insurer to InsuranceINTEL. According to InsuranceINTEL, Desjardins Insurance offers the option of insuring more than one person, but only under a joint-first-to-die policy.
This article is a Magazine Supplement to the July issue of the Insurance Journal.
