Oct 10, 2026
Life Insurance Coverage Is Rising, but Canadian Families Still Face Coverage Gaps
More Canadians have life insurance than they did a year ago, but new research suggests that having a policy does not necessarily mean Canadians feel financially protected. PolicyMe’s second annual life insurance study, the 2026 Life Insurance Gap Report, conducted in partnership with Angus Reid, surveyed more than 1,500 Canadian adults about their life insurance coverage, confidence, and the barriers preventing them from getting adequate protection. The findings offer some encouraging news: 68% of Canadians now report having some form of life insurance, up from 58% in 2025. However, affordability remains a major obstacle, and many Canadians who already have coverage are uncertain whether their policies would provide enough financial support to their families.
More Canadians Have Life Insurance
The most positive finding from this year’s report is the increase in the number of Canadians with life insurance coverage. According to the study, 68% of Canadians have at least one type of life insurance policy, compared with 58% the previous year. For many Canadians, employer-sponsored benefits are an important source of that protection, with half of insured respondents reporting that they receive their life insurance through a workplace plan. Coverage increased across several demographic groups, with particularly notable gains among younger Canadians. Gen Z saw the largest year-over-year increase, with coverage rising from 30% to 58%. Among adults aged 18 to 34, coverage increased from 48% to 67%. Millennials also saw a significant increase, from 63% to 78%, while coverage among women increased from 55% to 68%. These changes suggest that more Canadians are beginning to recognize the role life insurance can play as they reach important financial milestones, including starting families, purchasing homes, taking on debt, and building long-term financial responsibilities.
Life Insurance Coverage Still Depends on Income
Although overall coverage has improved, the report highlights a significant gap between Canadian households at different income levels. Among households earning less than $50,000 per year, life insurance coverage increased by 16% compared with 2025. Despite that improvement, only half of these households have any type of life insurance. By comparison, 79% of households earning $100,000 or more have coverage. The difference illustrates one of the central challenges facing the Canadian life insurance market: the people who may have fewer financial resources to absorb the loss of a household income can also face greater difficulty paying for additional insurance protection. Regional differences are also apparent. British Columbia had the highest uninsured rate in the study, with 39% of residents reporting that they had no life insurance. In Atlantic Canada, the uninsured rate was lower at 28%.
Affordability Remains a Major Barrier
For Canadians who do not have life insurance, cost continues to be one of the biggest reasons. Thirty percent of respondents without coverage said affordability was a barrier to purchasing a policy. Another 15% said they had intended to buy life insurance but had postponed their plans because of rising living costs. For families, the pressure can be particularly significant. The report found relatively small increases in coverage among households with children. Only 20% of households with children reported having some form of life insurance, representing an increase of just 4% from the previous year. Nearly half of these respondents identified cost as the reason they did not have coverage. This is an important consideration as Canadian households continue to manage housing costs, food prices, debt payments, childcare expenses and other everyday financial obligations. When budgets become tighter, life insurance can be pushed down the list of financial priorities—even though the financial consequences of losing a primary income earner can be substantial.
Not Everyone Sees a Need for Life Insurance
Cost isn’t the only reason Canadians remain uninsured. About 26% of adults without life insurance said they did not have financial obligations, debt or dependents that would make a life insurance benefit important. Another 19% said they simply had not considered purchasing life insurance. This highlights an important misconception about life insurance: its relevance can change as a person’s financial circumstances change. Someone who is single with few financial obligations may have a relatively limited need for coverage today. But purchasing a home, getting married, having children, taking on significant debt or becoming financially responsible for an aging family member can change that calculation. For that reason, life insurance should not necessarily be viewed as a one-time financial decision. Coverage needs can change as income, debt, family responsibilities and long-term financial goals evolve.
Major Life Milestones Can Lead to More Coverage
For many Canadians, family protection remains one of the strongest motivations for purchasing life insurance. Nearly four out of five respondents—79%—said their family’s well-being was a factor motivating them to apply for life insurance. Major financial milestones can make the need for protection more apparent. Buying a home may mean taking on a large mortgage. Having children can create years of education, childcare and living expenses. Supporting aging parents can introduce another layer of financial responsibility. Life insurance can help provide financial resources to surviving family members when an insured person dies. Depending on the policy and the family’s circumstances, the benefit may help with expenses such as mortgage payments, outstanding debts, education costs, daily living expenses or other long-term financial needs.
Having Life Insurance Doesn’t Always Mean Having Enough
Perhaps the most important finding in the report is that increased coverage has not translated into a significant increase in confidence. About 24% of Canadians said they were not confident that their families would be financially secure if they died unexpectedly. That figure is only slightly lower than the 25% reported in the previous year’s study. The concern is even greater among households with children. Thirty percent of respondents with children reported a lack of confidence that their families would remain financially secure after their death. This distinction between having life insurance and having enough life insurance is critical. A policy may provide some financial protection, but the benefit may not be sufficient to replace lost income, pay off a mortgage, cover debts and support dependents over the long term.
Workplace Life Insurance May Not Be Enough
Employer-sponsored life insurance is an important source of coverage for Canadians, but relying entirely on workplace benefits can create uncertainty. Half of Canadians with life insurance receive their coverage through an employer. The most commonly reported workplace coverage amount was between $100,000 and $299,999. For some households, that amount may provide meaningful financial support. For others, it may fall considerably short of what would be needed to maintain their family’s financial stability. Even more concerning, 26% of Canadians with workplace life insurance said they did not know how much coverage they actually had. That makes reviewing workplace benefits an important part of financial planning. Employees should understand the amount of coverage provided, what happens to the policy if they change jobs, and whether the benefit is sufficient for their family’s current financial obligations.
Review Your Coverage as Your Life Changes
The findings from the 2026 Life Insurance Gap Report suggest that the conversation around life insurance should go beyond simply asking whether someone has a policy. The more important questions are: How much coverage do you have? What would happen to your family financially if you died? And would your current policy provide enough support to cover your family’s needs? These questions become especially important after major life changes. Marriage, the birth of a child, purchasing a home, taking on substantial debt, a significant change in income or becoming responsible for another family member can all affect how much life insurance may be appropriate. Reviewing coverage periodically can help Canadians identify potential gaps before they become a serious financial risk.
The Bottom Line
The increase in Canadian life insurance coverage is encouraging, but the latest research shows that coverage alone does not necessarily create financial confidence. With nearly one in four Canadians unsure whether their families would be financially secure after their death, understanding the amount and type of protection in place is just as important as having a policy. This is particularly relevant for Canadians who rely primarily on employer-sponsored insurance. Workplace coverage can be valuable, but it may not always match a family’s current income, debts, mortgage and long-term financial needs.
If you are unsure whether your current life insurance coverage is enough, reviewing your needs with an insurance professional can help you better understand your options. A personalized assessment can help identify potential coverage gaps and determine whether additional protection may make sense for you and your family.
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