Illness could drain savings in months
Despite rising sales of life insurance products across Canada, many households remain without sufficient financial protection, recent industry reports show.
A new survey by RBC Insurance found that while 58% of Canadians consider life insurance important, only 39% have coverage, showing a 19-point gap between awareness and action. Similar gaps exist for other types of protection: 31% said disability insurance is important, but just 10% are covered; 29% said critical illness coverage is important, yet only 9% hold a policy.
“Canadians know insurance matters, but far too many don’t have a plan in place,” said Adam Mamdani, vice president at RBC Insurance. He added that many prioritize smaller warranties over protection for their income or health, which leaves families vulnerable during unexpected events.
The PolicyMe survey released in August revealed similar findings, showing that 42% of Canadians either lack life insurance or are unsure of their coverage status. Among those without a policy, 65% said they are unlikely to obtain one within the next five years. A quarter of respondents expressed little or no confidence that their families would remain financially stable if they died suddenly, compared to 80% of insured Canadians who said they feel confident about their families’ security.
Affordability, medical requirements, and industry distrust remain barriers to broader coverage. Thirty-four percent of uninsured respondents said life insurance is too expensive, including 42% of those with children. Among parents, 49% said they do not plan to purchase coverage in the next five years, primarily due to high premium costs. Another 26% said medical tests discourage them from buying insurance, while one in five believe that insurers approve only half or fewer of their claims, despite a 99% payout rate nationwide.
While many Canadians remain hesitant, industry sales data indicate steady growth. LIMRA’s Canadian Individual Life Insurance Sales Survey reported that new annualized premiums grew 5% year over year to C$532 million in the second quarter of 2025. Whole life policies accounted for 68% of the market, with premiums up 6% in Q2 and 10% year-to-date. Universal life premiums rose 5% in Q2 and 8% year-to-date, maintaining a 13% market share, while term life premiums increased 2% in the quarter, holding 19% of total new annualized premiums.
Industry observers say the data suggest stable demand for life insurance, even as perceptions of affordability and trust continue to limit broader participation. Mamdani encouraged Canadians to develop a financial plan and consult insurance professionals to ensure their families are protected against unexpected life events.
