Canadian life insurance statistics: 5 trends to know in 2025
1. Nearly half of all Canadians don’t have life insurance (or don’t know if they do)
PolicyMe’s 2025 Life Insurance Gap Report found that 42% of Canadians don’t have life insurance, or they’re not sure whether they do. That’s over 17 million Canadians—nearly half the adult population—missing a key financial protection.
What’s more, among Canadians who don’t have life insurance, 65% say that they’re not likely to get a policy in the next five years, and 27% of Canadians say they don’t believe they actually need life insurance.
But here’s the reality: Of the Canadians living without life insurance, 23% have children at home—and one in four Canadians say they’re not sure their family would be financially secure in the event of their passing.
In other words, the number of Canadians who need life insurance is much bigger than the number that have it. Based on PolicyMe’s research, as many as 4 million Canadian parents may be living in a life insurance gap that would leave their families exposed to debt, financial loss, and a drop in quality of life if they passed away uninsured.
PolicyMe found that 80% of Canadians with life insurance say they’re confident that their families would be financially secure if they died.
2. One in three uninsured Canadians believes life insurance is “too expensive”
Why is the life insurance gap so large? The answer’s pretty simple: life is getting more expensive, and for many Canadians, life insurance looks like just another bill that won’t fit the budget.
Of the Canadians who told PolicyMe that they don’t have life insurance, 34% said they were reluctant to shop for coverage because they think it’s too expensive. One in 10 added that high living costs have delayed their plans to buy life insurance.
But the idea that life insurance is a major expense is often a misconception. For healthy, non-smoking Canadians under age 40, the cost of a term life insurance policy is typically less than $30/month for as much as $500,000 in coverage. If you need a smaller amount of coverage, your rates could be as low as $10/month or less.
* Average monthly PolicyMe rates for a non-smoking applicant with $500,000 of coverage
Finding $20 per month for a basic term life insurance policy could mean the difference between financial security and significant debt for your loved ones if you die unexpectedly.
Will life insurance really pay out?
You may have heard the myth that “life insurance almost never pays out.” In fact, PolicyMe found that more than one in five Canadians believes that life insurance companies pay out less than 50% of the time.
But the statistics tell a different story.
In 2024, Canadian life insurance companies paid out $18.6 billion in benefits to policyholders and beneficiaries, including $8.9 billion in death benefits, according to the Canadian Life and Health Insurance Association. Life insurance claims are rarely denied, with common causes of denial including stopped premium payments or inaccurate information in an application. As long as you pay your premiums and keep your beneficiaries’ information up to date, it’s rare to have a life insurance claim denied.
What is common in the case of term life insurance is for policyholders to outlive their policy’s active term. These aren’t cases of denied claims—this is how term life insurance is meant to function. Because the goal is to outlive your policy, term life insurance premiums are much lower than premiums for permanent life insurance policies with guaranteed payouts.
3. Fear of medical exams makes Canadians less likely to buy life insurance
Setting aside the cost of life insurance, a major deterrent for many Canadians who don’t have a life insurance policy are the medical exams required for life insurance underwriting. Approximately 26% of Canadians say that medical exams make them less likely to buy a life insurance policy.
We get it—nobody looks forward to a medical exam. And for Canadians with a variety of health conditions, a medical exam could raise the cost of coverage, compounding concerns about affordability.
But there’s good news: thanks to digital insurance leaders like PolicyMe, the life insurance industry has started embracing technology’s power to reduce the burden of medical exams on applicants. Roughly 60% of PolicyMe customers get life insurance without a single medical exam. If fear of tests, needles, or high rates is holding you back from getting the life insurance your family needs, you may want to give digital underwriting a try.
While PolicyMe streamlines the life insurance underwriting process using digital tools, some companies offer “guaranteed issue” life insurance products that are designed to be sold with no medical exam at all. While that might sound great at face value, these policies are typically significantly more expensive than fully underwritten coverage. If you have health conditions that make it impossible to get other coverage, you may want to look into these policies—but treat them as a last resort.
4. Canadians’ life insurance needs are growing
The Canadian life insurance industry is growing, and so are the individual insurance needs of many Canadians.
In 2024, 23 million Canadians had life insurance policies in force, for a total of $6 trillion in life insurance coverage nationwide. The average amount of life insurance coverage for a Canadian household was $509,000—up 5.4% from just $483,000 in 2023. Since 2014, term life policies have driven a significant increase in individual life insurance policies, from just 59% of policies in force ten years ago to 66% today. In the first half of 2025, LIMRA’s Canadian Individual Life Insurance Sales Study reported a 9% increase in total new annualized premium and a 2% increase in policies sold.
Why are Canadians buying more life insurance? For most individuals, a larger life insurance policy likely reflects the increasingly difficult financial situation that everyday Canadians face. Rising home prices require larger insurance policies to cover the full cost of a mortgage. Coverage amounts also reflect the ballooning price of childcare and everyday expenses.
Not sure how much your own life insurance policy should cover? PolicyMe’s online life insurance calculator can help you decide how much to buy—or offer a quick check on how well your current coverage is meeting your family’s needs.
5. Generational shifts make life insurance a harder sell for some young Canadians
Despite the growing financial pressures on Canadians today, life insurance is still a hard sell for many—and the problem isn’t just limited to Canada. Campgemini’s 2026 World Life Insurance Report found that while 68% of people under 40 worldwide are considering buying life insurance, far fewer are actually investing in coverage.
The #1 reason under-40s gave for not buying life insurance? It’s just “not aligned with my life stage,” according to 32% of participants in the Capgemini study.
Adult life looks different for millennials and Gen Z than for previous generations. For many young Canadians, kids and a mortgage—two of the most common reasons to buy life insurance—just aren’t in the cards, either for financial or for personal reasons.
But young Canadians still need life insurance, even without dependents or major debts. Buying a simple life insurance policy before age 30 is an affordable way to:
- Lock in financial protection for potential future dependents (life happens!)
- Cover funeral expenses
- Keep student debt and other non-mortgage financial obligations from burdening family members
And increased job mobility means that millennials and Gen Z—who average just 2 years and 3 months at every job compared to baby boomers’ 8 years—have less consistent access to employer-sponsored life insurance benefits. That’s where affordable term life insurance comes in: a straightforward, low-cost solution to the Canadian life insurance gap.
FAQ: Life insurance statistics in Canada
Sources
- PolicyMe, Unprepared: The 2025 Life Insurance Gap Report. https://www.policyme.com/blog/life-insurance-gap-study
- Canadian Life and Health Insurance Association, Canadian Life and Health Insurance Facts // 2025 Edition. http://clhia.uberflip.com/i/1539498-canadian-life-and-health-insurance-facts-2025-edition/0
- Capgemini Research Institute, LIMRA, and Future4Care, World Report Series 2026: World Life Insurance. https://www.capgemini.com/wp-content/uploads/2025/10/WLIR_2025_2-MB.pdf
Helene Fleischer is Content Marketing Manager at PolicyMe, with 9 years in content marketing and 4 in Canada’s insurance industry. She works with skilled writers and licensed insurance advisors to create useful resources that help Canadians navigate insurance decisions with confidence and clarity.
Helene Fleischer is Content Marketing Manager at PolicyMe, with 9 years in content marketing and 4 in Canada’s insurance industry. She works with skilled writers and licensed insurance advisors to create useful resources that help Canadians navigate insurance decisions with confidence and clarity.