Rising expenses and mistrust push more Canadians to skip life insurance, widening the protection gap
Nearly two in three uninsured Canadians say they are unlikely to get life insurance in the next five years—a finding that underscores a growing gap in financial protection as living costs climb.
The Unprepared: The 2025 Life Insurance Gap Report from PolicyMe, in partnership with Angus Reid, reveals that affordability, medical requirements, and mistrust of the industry are the main barriers keeping households unprotected.
The report shows that almost half of Canadians (42 percent) either do not have life insurance or are unsure if they do, and nearly half (49 percent) of Canadian parents say they do not plan to purchase life insurance within the next five years.
Confidence in financial security is wavering.
One in four Canadians (25 percent) is not confident or is unsure that their families would be financially secure if they passed away unexpectedly.
In contrast, 80 percent of those with life insurance feel confident in their family’s financial security.
Regional disparities are evident, with British Columbia having the highest share of residents without coverage or who are unsure at 50 percent, and Atlantic Canada residents being the least confident at 23 percent.
Affordability remains a central concern.
More than one in three Canadians without coverage (34 percent) say it is too expensive, and 42 percent of those have children in the household. High living costs have delayed plans for one in ten (10 percent) Canadians, including 22 percent with children.
Among parents, 42 percent cite expense as the main reason for not purchasing, 12 percent say they have not thought about it, and 8 percent believe they do not need it.
Overall, more than one in four Canadians (27 percent) believe they do not need life insurance.
Medical requirements are also a significant deterrent.
Over one in four Canadians (26 percent) say that the medical tests required for life insurance make them less likely to purchase it. Among those likely to buy in the next five years, more than one in three (37 percent) say medical tests make them hesitate.
Mistrust in the industry persists.
One in five Canadians (21 percent) believes life insurance companies pay out 50 percent or less of their claims, despite a 99 percent claim payout rate in Canada.
Nearly half (49 percent) believe insurers pay out more than 51 percent of claims.
Coverage through employers remains the most common type (37 percent), followed by term life (15 percent), mortgage life (8 percent), and other forms (2 percent).
Younger Canadians (18–34) are the most likely age group to consider purchasing life insurance at 34 percent, compared to 22 percent of those aged 35–54 and only 4 percent of those aged over 55.
Among those without insurance or unsure, nearly one in four (23 percent) have children living at home.
Andrew Ostro, CEO and Co-founder of PolicyMe, said life insurance is meant to provide peace of mind, but many Canadians either lack coverage or do not trust the industry. He added that the report highlights how traditional insurance remains difficult to navigate.
