Matt Hands, VP, Insurance and MoneySense
The Royal Bank of Canada, or RBC, is Canada’s biggest bank by market capitalization, with over 16 million clients and has 80,000 employees worldwide. In fact, RBC is Canada’s biggest overall company by market cap, and in the top ten for revenue and profit. RBC life insurance has been offered since the 1960s as part of its insurance division, RBC Insurance. RBC Insurance is now the largest bank-owned insurance organization in Canada, with over 5 million clients.
For life insurance, RBC has the most sophisticated product lineup, offering an incredibly flexible term policy, as well as permanent and universal policies. While RBC life insurance doesn't have the product depth of the big three Canadian life insurance companies (which include Sun Life, Great West Life, and Manulife) RBC certainly beats out other bank-owned life insurance offerings. For instance, BMO life insurance is a very basic product, while TD Bank doesn't offer participating or universal life insurance.
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RBC was originally founded as the Merchants Bank of Halifax in Halifax, Nova Scotia, servicing the local timber and fishing industries, as well as European and Caribbean importers and exporters. The name to the Royal Bank of Canada in 1901, as part of its western expansion. In 1998, a proposed merger between RBC and BMO was knocked back by the Canadian government. That same year, another proposed merger between TD Bank and CIBC was also knocked back. While RBC was founded in Halifax, the company now has headquarters in two locations. RBC’s corporate headquarters are in Toronto, Ontario, while its official head office is in Montreal, Quebec.
Of the bank-owned life insurance companies, RBC Insurance has one of the most comprehensive product lines, offering term, permanent, and universal life insurance.
RBC term life insurance is one of the most flexible term life insurance policies available in Canada, from either the banks or the big three life insurance companies. RBC offer a standard and a simplified product, the latter requiring less personal information but attracting higher premiums. Both are available for any term between 10 and 40 year, are renewable up to age 85, and convertible to permanent or universal life insurance until at 71. The standard plan also allows you to exchange your policy for a different term length. Riders on the policy can make it a joint policy, add children, additional accidental death coverage, and more.
RBC permanent life insurance has only a limited product range, offering only guaranteed or term-to-100 coverage. The bank doesn’t offer any participating or non-participating whole life insurance that accumulates a cash value, with the exception of their universal life insurance product. RBC’s guaranteed insurance is one of the most flexible on offer, covering Canadian residents aged between 40 and 75 for up to $40,000. RBC’s term-to-100 product acts like a standard term life insurance policy, with no further premiums payable after you turn 100. It features comparable riders and optional coverage as does the main RBC term life insurance.
RBC universal life insurance is a fairly standard universal life insurance product, with access to a range of tax-effective investment options over the life of the policy. Additional benefits include the option of a single or joint policy, level or increasing benefits, a disability benefit and compassionate advance, as well as access to a wide range of additional riders. Being the only bank of the Big Five to offer universal life insurance, it makes RBC the best choice if you want to keep your finances with a single institution. Unlike the biggest stand-alone life insurance companies like Sun Life and Manulife, RBC universal life insurance is a fairly simple product, and relatively easy to understand.
RBC life insurance pros
- RBC life insurance offers a wider range of products than other banks that provide life insurance, but communicates the differences simply
- Of Canada’s Big Five banks, RBC is the only one offering universal life insurance
- With term life insurance of any number of years between 10 and 40 renewable to age 85, plus the option to convert until 71, RBC has some of the most flexible term life insurance of any Canadian life insurance company
- RBC guaranteed life insurance covers up to $40,000, higher than the $25,000 most insurers offer
- RBC offers automotive insurance and home insurance, and you’ll score a 10% discount by bundling. This may be cheaper for you than separate providers
RBC life insurance cons
- No participating permanent life insurance policy (although RBC universal life insurance is a kind of participating policy)
- Whole life insurance is limited to term-to-100, guaranteed, and universal coverage
As Canada’s largest bank by market capitalization, RBC has excellent excellent credit ratings with all of the major credit rating agencies, though slightly less than those of TD Bank:
- Standard and Poor’s: AA- (Very strong)
- Moody’s: AA2 (High quality)
- DBRS: AA high (Excellent)
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Matt Hands, Business Director of Insurance
With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read full bio
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