by Glenn Cooke
Looking for TD Mortgage Life Insurance? Know what you’re buying – we’ve read the contract and here’s what you need to know:
Ages 18-69, policy terminates at age 70.
Maximum coverage amount: $1,000,000
You may cancel the coverage at any time by calling TD or visiting a local branch. (Note: never cancel life insurance until you have sufficient replacement life insurance in force).
• The date the mortgage is paid in full or discharged.
• If your mortgage principle increases.
• At age 70.
• The date that the group policy terminates (note that TD’s mortgage life insurance is a contract between TD Bank and TD Insurance – you do not control when that policy terminates.).
• If TD starts legal proceedings against you.
This means that your coverage expires when every time your mortgage renews or if you switch mortgage providers.
This is group mortgage life insurance, so TD bank owns the policy.
The beneficiary of the life insurance is TD bank (not your named beneficiaries or family). Any claim amount is used to pay down the mortgage – but may NOT pay off the full amount. See the coverage amount section below.
Still Have Questions?
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Underwriting is generally a series of yes/no questions. However, no underwriting (evaluation of your ability to qualify for coverage) is done when you apply. Instead, TD uses what is known as post-claim underwriting. This means that they review your application after you die, in order to determine if you actually qualified for coverage. If they find that you did not qualify, then your claim is denied.
In addition, if you have two people insured with TD mortgage life insurance they will pay only one claim. This means that if two spouses are insured for the same mortgage, then you’re paying for two people to be insured but only one death claim will be paid.
Maximum coverage is $1,000,000. If your mortgage amount when you apply exceeds $1,000,00 then you are only covered for a prorated amount of your mortgage (and thus, your entire mortgage may not be paid off).
Example: Your mortgage balance is $1,200,000 when you apply for life insurance. Since maximum coverage offered is $1,000,000 you are provided with 83% (1,000,000/1,200,000) of your mortgage balance in coverage. If at claim time the balance on your mortgage is $1,000,000 then the maximum amount payable under your partial coverage will be $830,000.
Your coverage is not level. Instead it declines along with your mortgage balance.
Premiums are level over the term of your mortgage (often 5 years, if you’ve selected a 5 year term mortgage rate).
Provincial sales tax is also added onto your premiums.
Premiums will increase with age at the time of new mortgage applications, as well as requiring a new medical application.
Link to the TD mortgage life insurance certificate of insurance: