How to navigate mortgage protection plans in Canada

Jan 30 2021, 3:00 pm

The year 2020 was a wild ride, and it’s hard to imagine another year like it. That’s the funny thing about the future — try as we might, we never really know what’s around the corner.

This unpredictability is the reason why it’s so important to play defence with our money — to help protect us from the unknown and unanticipated. One simple strategy for homeowners looking to better safeguard their families is to combine every personal-finance guru’s faithful sidekick, the emergency fund, with the lesser-known but powerful mortgage protection insurance.

Supplementing your emergency fund with mortgage protection insurance 

Insurance can be an important part of our overall financial picture and something that everyone should consider, but in the realm of personal finance, it’s often the last priority.

One way for folks to safeguard their money is to establish and maintain a household emergency fund (some of us in the know would refer to this as “self insuring”). This is a great option to help protect yourself against unfortunate surprises like having your laptop stolen, sudden car repairs, or replacing the sliding patio door (you know — the door you really, truly thought was open when you handed your partner that pitcher of lemonade last August). 

However, one limitation to emergency funds is that they rarely grow to the point that they can defend against true catastrophe. Sure, if you become sick or lose your ability to work, $10,000 in an emergency fund will help, but it could only be a fraction of the help you need.

That’s why insurance can be an important part of a defensive strategy as it may be able to assist beyond the limit of an emergency fund. 

Helping protect your ability to pay your mortgage  

Emergency funds help us not sweat the small stuff, but for the real big uglies, insurance is there. One example is TD Mortgage Protection, which can help protect your biggest financial obligation — the home that you’ve most likely worked for years to move into.

Meanwhile, TD’s Optional Mortgage Critical Illness and Life Insurance provides life, terminal illness, accidental dismemberment, and critical illness coverages — including paying or reducing the outstanding mortgage balance in the event of one of these incidents. 

That means the insurer would pay the outstanding balance to The Toronto-Dominion Bank, subject to the amount of insurance you applied and were approved for and limitations and exclusions as outlined in the Certificate of Insurance (that’s the document containing defined terms, benefits, features, limitations, and exclusions). Plus, these plans have the convenience of the premium being withdrawn from your account simultaneously with your mortgage payment.

To put it simply, an example of how this works would be a small family with a single breadwinner. If the breadwinner is insured by the plan and is diagnosed with a covered critical illness, the insured’s outstanding balance on the mortgage could be paid, subject to restrictions and limitations in the Certificate of Insurance. Except, instead of slowly paying the benefit amount towards the insured debt over decades, they swoop in with the largest loaf of multigrain you’ve ever seen (to be clear, in this metaphor, bread is money).

Life can be more complicated than the above example, but the point is, if others rely on your ability to pay your mortgage, you can help protect them with a product like TD Mortgage Protection.  

To be eligible to apply for TD Mortgage Protection, you need to have a conventional or Canadian Mortgage and Housing Corporation (CMHC) mortgage. You’ll also need to be a TD Mortgage borrower or guarantor and meet some other eligibility restrictions such as being between the ages of 18 and 69 to apply for Mortgage Life Insurance or 18 to 55 if you want to also apply for Mortgage Critical Illness Insurance.

These plans have the convenience of the premium being withdrawn from your account simultaneously with your mortgage payment.

Not every company is created equal. Working with a trusted, household name like TD brings confidence since they’re fully equipped to answer direct questions from homeowners and would-be homeowners alike. 

TD also provides a handy online tool to help estimate the premium for TD Mortgage Protection and the coverage you’re eligible for.

Once you’ve checked out the tool and reviewed the product details, including benefits, features, limitations and exclusions, applying for TD Mortgage Protection can be easy. You can apply online, over the phone, or you can mask-up and apply in person at your local TD Canada Trust branch. For more information visit

All applications subject to approval. Accidental dismemberment coverage is underwritten by TD Life Insurance Company (“TD Life”), and all other coverages are underwritten by The Canada Life Assurance Company.

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