Bank Comparison
TD Bank Mortgage Life Insurance:
Is It Worth It?
TD Canada Trust charges approximately $67.66/month for mortgage life insurance on a $500K mortgage for a 35-year-old non-smoking woman. Over 20 years, that's $16,238 for coverage that declines to $0.
TD Bank Monthly
$67.66
per month
20-Year Total
$16,238
for declining coverage
You Could Save
$7,838–$10,238
with term life
TD Bank vs. Independent Term Life
Based on a 35-year-old non-smoking woman, $500K mortgage, 20-year term.
| Feature | TD Bank | Term Life |
|---|---|---|
| Monthly Premium | $67.66 | $25–$35 |
| 20-Year Total Cost | $16,238 | $6,000–$8,400 |
| Coverage Type | Declining | Level (stays at $500K) |
| Beneficiary | The Bank | Your Family |
| Underwriting | Post-Claim | Full (Upfront) |
| Portable? | No | Yes |
| Can Be Denied After Death? | Yes | No |
What TD Bank Won't Tell You About Their Mortgage Insurance
TD's mortgage life insurance is a declining balance product. Your coverage decreases as your mortgage balance goes down, but your premium stays the same. You pay the same amount in year 20 as year 1, but your coverage is a fraction of what it was.
TD is the beneficiary of the policy, not your family. If you pass away, the payout goes directly to TD to pay off the mortgage. Your spouse cannot use the funds for living expenses, childcare, or anything else.
TD uses post-claim underwriting, meaning your health is reviewed after a claim is filed. This means your family's claim could be denied years after you've been paying premiums — if TD finds any undisclosed health condition.
Your coverage is not portable. If you refinance with another lender, you lose your TD mortgage insurance and must reapply elsewhere at your current (older) age and health status.
TD Bank Mortgage Life Insurance — Frequently Asked Questions
Does TD Bank offer life insurance for mortgages?
Yes. TD Canada Trust offers mortgage life insurance (also called TD Mortgage Protection) as an add-on when you take out a TD mortgage. It pays off your remaining mortgage balance if you die, but TD — not your family — is the beneficiary. It is not the same as standalone term life insurance.
How much does TD Bank mortgage life insurance cost?
TD mortgage life insurance costs approximately $67.66/month for a $500K mortgage for a 35-year-old non-smoking woman. Rates vary by age, gender, and coverage amount. Over 20 years, this adds up to over $16,000 — while your coverage is declining every year as you pay down the mortgage.
Is TD mortgage insurance the same as life insurance?
No. TD mortgage insurance is a group creditor insurance product — not individual life insurance. The key difference: with TD mortgage insurance, the bank is the beneficiary and the payout only covers your mortgage. With term life insurance, your family chooses how to use the money. TD's product also uses post-claim underwriting, which means claims can be denied after your death.
Can I cancel TD mortgage life insurance?
Yes. TD mortgage insurance can be cancelled at any time. You won't face a penalty. If you decide to switch to individual term life insurance (which most advisors recommend), simply notify TD in writing. Keep your new policy active before cancelling TD's to avoid any coverage gap.
What's better than TD mortgage insurance?
Independent term life insurance is almost always better than TD mortgage insurance. For a 35-year-old non-smoker, a $500K 20-year term life policy typically costs $25–$35/month — roughly half of TD's rate — and your family (not TD) gets the full $500K regardless of your remaining mortgage balance. The coverage is also fully underwritten upfront, so claims cannot be denied after death.
Is TD Canada Trust life insurance worth it?
For most Canadians, TD Canada Trust mortgage life insurance is not worth it. You pay a flat premium ($67.66/month on a $500K mortgage) but receive less coverage every year as your balance goes down. Meanwhile, an independent $500K term life policy stays at full coverage for roughly $25–$35/month. The only case where TD's product may make sense is if you can't qualify for individual life insurance due to health reasons.
How does a TD mortgage insurance calculator work?
A TD mortgage insurance calculator estimates your total premium cost over the life of your mortgage. For example: a $500K mortgage at $67.66/month = $811.92/year. Over 20 years = $16,238 — but your coverage drops from $500K to $0 as you pay down the mortgage. By contrast, a $500K term life policy at $30/month = $7,200 over 20 years, with the full $500K available to your family throughout. That's roughly $9,000 in savings.
TD Canada Trust Life Insurance: Is It Worth It?
TD Canada Trust offers what they call TD Mortgage Protection — a form of group creditor insurance attached to your TD mortgage. It's sold as “life insurance” but works very differently from a standalone life insurance policy. Here's what you need to know before you sign.
The core problem: TD Canada Trust life insurance for your mortgage is a declining balance product. You pay a fixed monthly premium for the entire term, but the death benefit shrinks every month as you pay down your mortgage. In year 1, you have $500K in coverage. In year 20, you might have $100K — but you're paying the same premium you were in year 1. The value per dollar paid deteriorates rapidly.
For most TD mortgage holders, independent term life insurance is a far better option: same coverage amount, lower monthly cost, and the full death benefit stays at $500K regardless of your mortgage balance. Your family — not TD — decides how to use the payout.
TD Mortgage Insurance Calculator: Real Numbers
The table below shows what TD Canada Trust mortgage life insurance actually costs vs. a comparable term life policy, at key milestones over a 20-year mortgage.
| Year | TD Coverage Remaining | TD Cumulative Cost | Term Life Coverage | Term Cumulative Cost |
|---|---|---|---|---|
| Year 1 | ~$490,000 | $812 | $500,000 | $360 |
| Year 5 | ~$440,000 | $4,060 | $500,000 | $1,800 |
| Year 10 | ~$360,000 | $8,119 | $500,000 | $3,600 |
| Year 15 | ~$240,000 | $12,179 | $500,000 | $5,400 |
| Year 20 | ~$80,000 | $16,238 | $500,000 | $7,200 |
Based on a $500K mortgage, 35-year-old non-smoking woman. TD rate: $67.66/month. Term life estimate: $30/month. Mortgage balance assumes 25-year amortization at 5%.
TD Life Insurance vs. Term Life: The Key Difference
The most important distinction: with TD Canada Trust life insurance, TD Bank is the beneficiary — not your family. If you pass away in year 15 with $240,000 remaining on your mortgage, TD gets $240,000 and your mortgage is cleared. Your spouse cannot use those funds to pay rent, cover childcare, or keep the lights on. The money goes to the bank, full stop.
With independent term life insurance, your spouse or named beneficiary receives the full $500,000 death benefit directly. They can pay off the mortgage, invest the remainder, cover living expenses, or use it however they need. The flexibility is enormous — and the cost is roughly half what TD charges.
Bottom line: TD Canada Trust life insurance for your mortgage costs more, covers less over time, and delivers the payout to the bank instead of your family. For most Canadians with reasonable health, independent term life is the smarter choice. Use our calculator to see your exact savings.
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