Parents are among the most likely to have a protection gap
September is Life Insurance Awareness Month and new data reveals that a growing number of Canadians remain without financial safeguards for their families.
Almost half of Canadians either do not have life insurance or are unsure if they do, according to the survey from PolicyMe in partnership with Angus Reid. While 58% of respondents are covered, most commonly through workplace benefits, coverage through term policies (15%) and mortgage life insurance (8%) is far less common.
Nearly two thirds of uninsured Canadians (65%) say they don’t expect to purchase a policy within the next five years. Younger Canadians (18–34) are the most open to the idea (34%), but interest drops sharply among those 55 and older (4%).
Particularly worrying is that nearly half of parents (49%) have no plans to buy life insurance in the next five years, with 42% pointing to cost as the primary barrier. Among the uninsured or uncertain, nearly one-quarter (23%) are raising children at home.
The cost-of-living crisis is a key factor in the protection gap with more than one in three respondents without coverage (34%) saying that premiums are unaffordable, and one in ten report delaying plans due to rising expenses. More than four in ten of those citing affordability issues have children.
Over a quarter of Canadians (26%) say medical exams discourage them from pursuing coverage, and among those considering buying in the next five years, more than a third (37%) say such requirements make them think twice.
Skepticism about insurers is also widespread with the survey revealing that one in five Canadians believe that life insurance companies pay out fewer than half of claims, despite the industry reporting a 99% payout rate.
One in four Canadians (25%) admit they are not confident, or are unsure, that their household would remain financially stable if they died unexpectedly, while 80% of those with coverage say they feel secure in their family’s financial future.
Geographically, the gap is most striking in British Columbia, where half of residents report being uninsured or unsure about their coverage. Confidence is also lowest in Atlantic Canada, with nearly one in four residents doubting their families’ ability to cope financially after a sudden loss.
