What Is It?
Balance protection insurance (also called credit card payment protection or creditor insurance) is an add-on product that pays your minimum credit card payment for a period if you lose your job, become disabled, or die. Canadian banks — particularly the Big Six — have aggressively sold these products, sometimes enrolling customers during phone calls without adequate disclosure or enrolling them automatically.
The Financial Consumer Agency of Canada (FCAC) has investigated and fined several banks for improper sales of these products. If you’re enrolled, you may be paying $0.79–$1.20 per $100 of your monthly balance — on a $5,000 average balance, that’s $39–$60/month for coverage most people never use or claim.
Do I Qualify?
- You have a credit card with a monthly charge described as “balance protection,” “payment protection,” “credit balance insurance,” or similar
- You did not actively sign up for this product, or you signed up years ago and no longer want it
- You are a Canadian credit card holder at any financial institution
How to Cancel and Get a Refund
Step 1 — Check your statement. Look for a line item that appears monthly on your credit card statement. Common names: “Credit Card Balance Protection,” “Payment Protector,” “Creditor Insurance,” “Card Protection Plan.”
Step 2 — Call the number on the back of your card. Ask to cancel the balance protection product. You do not need a reason. The cancellation is usually processed immediately.
Step 3 — Request a refund of recent premiums. FCAC guidelines require banks to refund premiums paid in the last 30–60 days when cancelling. Some banks offer refunds of up to 3–6 months of premiums, especially if you challenge whether you actually consented to enrolment. Use the phrase: “I don’t believe I clearly consented to this product and I’d like a refund of premiums paid.”
Step 4 — Escalate if refused. If the bank refuses a refund:
- File a complaint with the bank’s internal complaint process (required by FCAC)
- Escalate to the Ombudsman for Banking Services and Investments (OBSI) at ombudsman.ca
- File a complaint with FCAC at fcac-acfc.gc.ca
What Most People Don’t Know
- FCAC fined TD Bank $4.1 million in 2022 and required customer remediation for improper sales of creditor insurance products — if your bank has been subject to a FCAC enforcement action, you may be entitled to compensation even without individually complaining.
- The product pays the bank, not you. Balance protection covers your minimum payment or balance — but the payments go to the lender. It doesn’t protect your credit score or give you cash.
- The underwriting exclusions are extensive. Pre-existing conditions, self-employment, contract work, and many other circumstances are typically excluded from disability and job loss claims.
- You can cancel and re-enrol later. Cancelling balance protection does not affect your credit card account, credit limit, or interest rate. You can enrol again in the future if your circumstances change.
Frequently Asked Questions
How do I know if I have balance protection insurance?
Check your credit card statement line by line. The charge appears monthly and is usually a small percentage of your balance. Your credit card terms and conditions will also list whether optional insurance is included.
Can I get a refund for years of premiums?
Typically no — the standard refund window is 30–60 days. However, if you can demonstrate you never consented to enrolment (for example, if you were enrolled during a phone call without a clear opt-in), FCAC has required banks to remediate affected customers with larger refunds. This requires a formal complaint.
Is the OBSI complaint process free?
Yes. The Ombudsman for Banking Services and Investments (OBSI) provides free, independent dispute resolution for banking and investment complaints. Banks are required by law to participate.
Does balance protection insurance count as a “reasonable” product for most people?
Generally no. Consumer advocates consistently find that balance protection insurance is overpriced relative to benefits paid. The payout rates (percentage of premiums returned as claims) are typically far below comparable insurance products. Most financial planners recommend emergency funds or separate disability insurance instead.