Matt Hands, VP, Insurance and MoneySense
Scotiabank is one of Canada’s ‘big five’ banks, alongside RBC, BMO, TD Bank, and CIBC. Scotiabank is the third largest based on both deposits and market capitalization. While it was founded in Halifax and primarily serviced the Maritimes, it is now run from Toronto, and has an international presence.
Scotiabank does not sell life insurance like traditional life insurance companies, or like bank-owned life insurance companies. Instead, ScotiaLife Financial offers a group life insurance plan to Scotiabank customers. This results in a very limited life insurance product range, with Scotiabank only offering term life insurance, mostly in 1 year terms.
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The Bank of Nova Scotia was founded in Halifax in 1832, originally established by to facilitate increased trans-Atlantic trade. While initially keep to the Maritimes, the bank eventually expanded westward, opening a branch in Winnipeg, Manitoba in 1882. While the branch would soon close, it began the Bank of Nova Scotia’s expansion to the American Midwest, opening branches in Minneapolis in 1885 and Chicago in 1892. The bank eventually continued its Canadian expansion in 1894, opening a branch in Newfoundland. By 1900, the bank had operations in all of the Maritimes, Quebec, Ontario, and Manitoba, as well as Boston, Massachusetts and Kingston, Jamaica.
The Bank’s headquarters moved from Halifax to Toronto in 1900, and grew through expansion and acquisition throughout the 20th century. It expanded in the Caribbean (although lost its branches in Cuba with the nationalisation of Cuban banks in 1960) and eventually into Asia. On September 11th 1961, the Bank of Nova Scotia became the first Canadian bank to appoint a female bank manager. The bank rebranded as Scotiabank worldwide in 1975. Since 2000 the bank continued to expand through acquisition, purchasing ING Direct Canada in 2012, rebranding it to Tangerine in 2013.
Scotiabank life insurance is offered through the ScotiaLife Financial brand, but it does not operate like a traditional life insurance company. Scotiabank life insurance is a group policy offered to Scotiabank customers and their spouses, underwritten by Chubb, a global risk management firm. It’s similar to a group policy you might be offered by your employer, union, or other community group. Because the underwriter spreads out the risk over a large group, and administration fees are lower, premiums tend to be fairly cheap. However, that lower cost makes the policy less flexible.
Scotia Term 1 Insurance is the primary product Scotiabank offers. It’s a simple, one year term life insurance policy. Term 1 has a maximum insurable age of 70, which is significantly lower than mainstream term life insurance policies. Term 1 premiums are primarily age-based until age 50, after which a medical may be required. A 50% living benefit, up to $50,000, is available is you were to contract a terminal illness while covered. Being a group policy, there’s little flexibility on the terms of the contract. Despite its negatives, the premiums are relatively inexpensive, and an easy, simple option for Scotiabank customers.
Scotia Term 10/20/100 Insurance are products written about online, but the home pages for them on the Scotiabank website no longer exist. Term 10 and term 20 were standard term life insurance products, available until age 75 for coverage of up to $250,000. Scotiabank’s Term 100 product was identical to Term 10 and 20, but as a term-100 product, providing lifetime coverage.
Scotiabank Guaranteed life insurance. ScotiaLife Financial also offer a guaranteed product, for people between age 50 and 75. Like most guaranteed life insurance policies, this plan only covers up to $25,000, with a series of restrictions on the policy that make it harder to claim. Learn more at our page on guaranteed life insurance.
Other Scotiabank life insurance products include mortgage insurance, as part of their lending department, as well as accidental death insurance. While normally purchased as a rider, or added benefit to an existing policy, Scotia’s accidental death policy is available as a standalone product for Scotiabank customers. In fact, Scotiabank customers aged 17-74 can receive $5,000 complimentary accidental death insurance. As ScotiaLife Financial only offers a group policy for Scotiabank customers, rather than a full suite of life insurance products, there are no permanent life insurance policies available.
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Scotiabank life insurance pros
- As a large group policy, Scotia life insurance offers affordable term coverage to Scotiabank customers
- Simple coverage without complexity
- $5,000 accidental death coverage is free to all Scotiabank customers
Scotiabank life insurance cons
- No permanent life insurance policies
- Coverage only available for Scotiabank customers, or their spouse
- Life insurance by Scotiabank is not a traditional policy, it’s a group insurance policy underwritten by Chubb. This means less flexibility in the terms of the contract
- Coverage only available until age 70, significantly less than other insurers
- ScotiaLife Financial has gotten into legal trouble selling life insurance policies in the past. In 2015 they were fined $500,000 for selling life insurance through unlicensed telemarketers, which had been happening for 18 years
Scotiabank has strong ratings across all ratings agencies and categories, with a stable outlook from each of the major credit rating agencies:
- Standard and Poor’s: A+ (Very strong)
- Moody’s: AA2 (High quality)
- DBRS: AA (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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