May 30, 2026
New Study Reveals How Canadians Are Choosing Life Insurance in 2026
Canadians are becoming more strategic about life insurance coverage in 2026. A new study from MoneySense based on data from Policy Me shows that coverage choices are increasingly tied to life stage, family responsibilities, mortgages, and even changing lifestyle habits.
The report analyzed more than 18,000 customer interactions to better understand how Canadians choose term life insurance, who they name as beneficiaries, and which health and lifestyle factors are shaping the market today.
$500,000 Coverage Is the Most Popular Choice
One of the biggest findings from the study is that $500,000 has become the most commonly selected term life insurance amount among Canadians. Younger adults between ages 18 and 44 are also far more likely to choose longer policy terms, especially 30-year coverage plans.
Older Canadians, meanwhile, tend to select smaller policies and shorter coverage periods as mortgages are paid off and financial obligations decrease.
| Age Group | Most Common Coverage | Typical Term Length |
|---|---|---|
| 18–29 | $500,000 | 30 Years |
| 30–44 | $500,000 | 30 Years |
| 45–59 | $250,000 | 10 Years |
| 60+ | $100,000 | 10 Years |
The trend reflects how life insurance needs evolve over time. Younger families often need larger protection because of mortgages, children, and long-term financial commitments. As retirement approaches, coverage needs usually decline.
Mortgage Debt Continues to Drive Insurance Decisions
According to recent research from PolicyMe, mortgages remain one of the strongest reasons Canadians purchase life insurance coverage.
The report found that homeowners typically buy nearly 38% more coverage than non-homeowners, with many choosing policies worth $1 million or more. A long-term mortgage often aligns naturally with a 20- or 30-year term life insurance policy.
For many families, life insurance is not only about income replacement. It is also about protecting the family home and ensuring loved ones can continue managing financial obligations if something unexpected happens.
Men and Women Prioritize Different Beneficiaries
The study also uncovered noticeable differences in how men and women choose beneficiaries.
Nearly three-quarters of Canadians named a spouse or partner as their primary beneficiary. However:
- 83% of men selected a spouse or partner
- Only 66% of women did the same
- Women were more than twice as likely to include children as beneficiaries
These differences may reflect varying financial priorities and caregiving responsibilities within households.
Health Conditions Are More Common Than Many Expect
More than half of applicants reported at least one medical condition when applying for coverage. Mental health conditions were especially common among younger Canadians.
The most frequently reported conditions included:
- Allergy and immune disorders
- Diabetes
- Hypertension
- Respiratory conditions
- Mental health conditions
Interestingly, younger generations appear more willing to disclose mental health concerns during the application process, which could influence how insurers assess risk in the future.
Gen Z Drinks Less but Uses More Nicotine and Cannabis
Lifestyle habits are also changing across generations.
The study found that younger Canadians consume less alcohol than older generations, but nicotine and cannabis use are significantly higher among Gen Z applicants.
Because smoking, vaping, and cannabis use can affect insurance premiums, these trends may influence pricing and underwriting decisions over the next several years.
Why More Canadians Are Turning to Digital Insurance Providers
Digital-first insurance companies like PolicyMe continue gaining popularity by simplifying the application process and reducing paperwork.
According to the company, many Canadians avoid life insurance because they believe it is too expensive, too complicated, or requires lengthy medical exams. Their research suggests that 42% of Canadians either do not have life insurance or are unsure whether they do.
Online insurers are responding by offering:
- Faster digital applications
- Fewer medical exams for eligible applicants
- Flexible term coverage
- Simplified policy comparisons
- Lower operating costs
This modern approach is especially appealing to younger families shopping for affordable protection.
Protect Your Family’s Financial Future
Life insurance is no longer just a financial product for older generations. In 2026, more young Canadians are using term life insurance to protect mortgages, children, and long-term financial goals.
Whether you are buying your first home, starting a family, or reviewing your financial plan, comparing life insurance options early can help you secure better coverage and lower premiums.
👉 Ready to explore your options? Visit our Life Insurance Guide to learn more about coverage types, costs, and how to choose the right policy for your needs.
You can also compare rates directly from trusted Canadian insurers through our Get a Quote page.
For more details about the original study, see the full report from MoneySense.
Final Thoughts
The Canadian life insurance market is clearly evolving. Younger Canadians are purchasing larger policies for longer periods, homeowners are prioritizing mortgage protection, and digital insurance platforms are reshaping how coverage is purchased.
While trends can provide useful insight, the right life insurance policy still depends on personal finances, family responsibilities, and long-term goals. Choosing appropriate coverage means evaluating your own situation rather than simply following market averages.
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