42% of Canadians Lack Life Insurance: Are You Covered?

September is life insurance awareness month, and a new report from digital insurer PolicyMe, conducted with Angus Reid, highlights a troubling protection gap among Canadians. The study, Unprepared: The 2025 Life Insurance Gap Report, points to affordability concerns, medical screening requirements and a lack of trust in the industry as the main reasons many people remain uninsured.

The findings illustrate how many Canadians could leave their families financially exposed and explain why so many delay or avoid getting coverage.

How wide is the coverage gap?

PolicyMe’s research found that 42% of Canadians either have no life insurance or are unsure whether they do. Nearly two-thirds of those without coverage say they are unlikely to buy a policy in the next five years. The gap is especially large for parents: almost half (49%) of those raising children say they do not plan to purchase life insurance during the next five years.

Worryingly, one in four Canadians without life insurance are not confident their family would be financially secure if they died unexpectedly. By contrast, among policyholders, 80% say they feel confident their loved ones would be financially protected by their coverage.

These contrasts make clear that life insurance can deliver peace of mind — so the remaining question is why so many Canadians continue to postpone it.

Why Canadians are skipping life insurance

Cost is the most common barrier. More than a third of those surveyed cite expense as the main reason they don’t have life insurance, and 42% of that group have children at home. About 10% say the current high cost of living has pushed life insurance down the priority list, as discretionary spending is cut when budgets tighten.

Medical requirements deter many others. Roughly 26% of respondents report hesitation because of the medical questions and underwriting processes that some policies require.

Perhaps most strikingly, 27% of Canadians — more than one in four — believe they simply don’t need life insurance. That perception overlooks common household realities. For example, in a single-income family of four, the sudden loss of the primary earner could jeopardize everyday expenses such as mortgage or rent, groceries and childcare. A life insurance benefit can replace lost income, help pay outstanding debts and give the surviving parent time and financial breathing room to focus on raising the family rather than immediately worrying about bills.

The benefits of getting covered sooner

Timing matters with life insurance. Premiums generally become more expensive as you age — PolicyMe’s analysis notes that delaying coverage can increase costs by an average of about 8% each year you wait. Buying a term policy when you are younger locks in lower rates for the duration of the term, delivering long-term savings.

That said, buying coverage later is still better than never getting insured, and many people overestimate the cost. PolicyMe reports that a 20‑year term policy providing $500,000 of coverage typically costs around $20–$30 per month for someone who applies in their 30s. Online tools and digital providers have also simplified the process: you can now get quotes, complete medical questionnaires and finalize coverage digitally without lengthy agent visits or high-pressure sales pitches.

Life insurance is not intended to be complicated or out of reach. For most families it’s a practical tool to protect income, pay debts and provide financial stability during an emotionally challenging time. Starting sooner often reduces cost and increases certainty for those you would leave behind.

Read more about insurance:

• Your complete guide to life insurance in Canada
• Do I really need life insurance?
• Which type of life insurance is best?
• Do you have enough life, disability, and critical illness insurance? Find out before you need it