Key Canadian Life Insurance Statistics

Canadian life insurance coverage statistics for 2023

Millions of Canadians are protected with life insurance, but many still don't have this safety net in place. For some, that's because of a common misconception that life insurance costs too much.

But that's not necessarily the case. Term life insurance, for example, is an affordable life insurance option suited for most Canadians. With that said, though, many Canadians are paying more for life insurance than they need to.

• 22 million Canadians have life insurance coverage, totalling $5.3T.
• 64 per cent of Canadians value life insurance the most when choosing between life, health, home, and auto insurance.
• $458,000 is the life insurance protection of the average Canadian household.
• Canadians are overpaying by an average of 36 per cent for their life insurance policy.
• 80 per cent of Canadians believe Canadian life insurance rates are too expensive.

Whether Canadians believe life insurance is too expensive usually comes down to the type of policy they're looking at.

Whole life insurance, for example, is a popular option. But while it covers you for your whole life, it's also prohibitively expensive.

Term life insurance, on the other hand, covers you when you need it most and is typically up to seven and a half times cheaper than whole.

PolicyMe makes term life insurance accessible to Canadians with family-friendly perks and honest advice.

Percentage of people with life insurance in Canada

The percentage of Canadians with life insurance is growing, but many Canadians are still without coverage.

• 56 per cent of Canadians have life insurance.
• 44 per cent of Canadians don't have life insurance.
• ~8 per cent of respondents believe the process of getting life insurance takes too long.
• A 50 per cent growth in the number of Canadians purchasing or considering life insurance has occurred since the beginning of the COVID-19 pandemic.
• 67 per cent of those purchasing or consider life insurance since 2020 cite COVID-related concerns as motivating factors.
• 35 per cent of those who did not purchase life insurance cited a perceived lack of affordability as the reason.
• 6 per cent of Canadians bought life insurance in 2021.
• 40 per cent of those without life insurance report it's because they can't afford it.

LIMRA life insurance statistics for Canada

The Life Insurance and Marketing Research Association's most recent study paints a general picture of how and why Canadians shop for life insurance. Let's take a look at some of the deciding factors Canadians keep in mind.

Canadians’ top three reasons for buying life insurance include:‍

• 40 per cent of Canadians said covering final expenses was their top reason for purchasing life insurance.
• 32 per cent of Canadians said that they bought life insurance because it's a good/wise/necessary thing to do.
• 30 per cent of Canadians bought life insurance as a way to transfer wealth to their beneficiaries.

72 per cent of Canadian households prefer to buy life insurance through an agent. Other preferences include:

• 14 per cent of Canadians prefer to buy life insurance online.
• 8 per cent of Canadians prefer to buy life insurance through their work.
• 6 per cent of Canadians prefer to buy life insurance directly by phone or mail.

‍30 per cent of Canadians feel they should have more life insurance coverage in place, and 20 per cent of Canadian households feel they would face financial adversity if a primary wage earner suddenly passed.

Canadians’ knowledge about life insurance varies:

• 16 per cent consider themselves very knowledgeable about life insurance.
• 57 per cent consider themselves somewhat knowledgeable.
• 23 per cent do not consider themselves very knowledgeable or knowledgeable at all.

Life insurance growth rate facts and statistics‍

• The life insurance industry contributes more than $860 in economic growth for Canada.

Canadian life insurance claims statistics

• $14.3B paid in life insurance benefits.
• Of that, $8.4B was paid as death benefits and $5.9B was paid to living policyholders in the form of disability benefits, cash surrrenders and dividends.

How Canadians are buying life insurance

How Canadians are buying life insurance is changing, with more people embracing online life insurance solutions over in-person sales. While the majority of those who already have a life insurance policy bought it in person, more Canadians are now saying that they prefer to buy it online.

• ~80 per cent of Canadians purchase their life insurance through in-person sales.
• 49 per cent of Canadians that purchased life insurance through an advisor purchased a permanent policy.
• 2 per cent of Canadians who have or have had a life insurance policy purchased their previous policy online.
• 51 per cent of respondents report that they would purchase life insurance through an online platform if they were buying it today.
• 65 per cent of Canadians aged 18-34 and 39% of Canadians aged 55+ expressed willingness to purchase their life insurance online in the future.

PolicyMe is the leader in digital-first insurance in Canada with over $6B in coverage sold. Get a life or critical illness insurance quote online in seconds and apply in 20 minutes or less, on average and receive coverage from the best life insurance companies in Canada

What kind of life insurance are Canadians buying?

While many Canadians are satisfied with their life insurance purchase, they are often choosing a type of insurance that doesn't fit their unique needs. Term life insurance is typically the best option for most Canadians, while most other types of life insurance result in Canadians overpaying and not having sufficient coverage.

• 64 per cent of all policies in-force are individual life insurance policies, up from 56 per cent in 2010, driven primarily by term life insurance.

• 40 per cent of those aged 18-34, 41 per cent of those aged 35-54, and 62 per cent of those aged 55+ purchased life insurance through an advisor.
• 86 per cent of those with a permanent life insurance policy are sure they've made the right decision.
• Canadians saw a 46 per cent average reduction in premiums when they replaced their mortgage life insurance policy with a term policy, with payments falling from $67 to $36.

• Five to 10 times more commission is typically received by insurance brokers by selling permanent or "whole" life insurance policies instead of term policies.
• Whole life insurance can cost up to seven and a half times more than term life insurance in Canada.

Curious about the differences between term life insurance and whole life insurance? Our comprehensive guide will walk you through the ins and outs of each, and which might be best for you. 

Canadian group life insurance statistics

• 62 per cent of Canadians with life insurance have it through their employer.
• 53 per cent of Canadians who have life insurance solely through their employer are between the ages of 30 to 50, a group most likely to have dependents and large liabilities.

Parents and life insurance statistics

Thankfully, most parents have life insurance coverage in place. That said, they typically don't have the right coverage to protect their family. Many Canadian families only have protection through their employer or with a policy like mortgage life insurance, which won't give their family the safety net they really need.

• 77 per cent of Canadian parents with dependent children have a life insurance policy.

• 49 per cent of parents who don't have life insurance report that it is it's because it's too expensive.
• 33 per cent of parents with kids under the age of 18 have term life insurance, compared to 70 per cent of parents with life insurance as a work benefit.
• 44 per cent of those parents who have life insurance through work rely solely on this coverage, with no extra coverage in place.
• 25 per cent of Canadian parents with dependent children have mortgage life insurance.
• 22 per cent of parents with children under the age of 18 have purchased permanent life insurance.
• 23 per cent of parents purchased their children their own life insurance policy.

The bottom line: term life insurance is the best choice for most Canadians

• The majority of Canadians have life insurance coverage.
• Many are still without coverage or have policies that don't suit their needs.
• Most people think that life insurance is too expensive, but it doesn't have to be.
• Term life insurance is an affordable life insurance option suited to many Canadian families.

Our sources:

• Kienapple, Bronwyn. “Canadians and Money 2021-2022: 70% Say Canada Is Becoming Unaffordable [Study].” PolicyMe, Mar. 2023, www.policyme.com/blog/canadians-and-money-survey.
• McKay, Laura. “Survey Reveals Parents' Biggest Life Insurance Mistakes.” PolicyMe, Jan. 2023, www.policyme.com/blog/survey-reveals-parents-biggest-life-insurance-mistakes.
• McKay, Laura. “2 Out of 3 Canadians Stressed About Inflation in 2021 [New Study].” PolicyMe, Jan. 2023, www.policyme.com/blog/canadians-stressed-about-inflation-and-cost-of-living-study.
• “Half of Canadian Policyholders Are Being Sold a Costly Life Insurance Product That Most People Don’t Need.” PolicyMe, Jan. 2023, www.policyme.com/blog/canadian-policyholders-being-sold-a-costly-life-insurance-product.
• “New Analysis Reveals Canadians Are Overpaying for Life Insurance by 36%.” PolicyMe, Jan. 2023, www.policyme.com/blog/new-analysis-reveals-canadians-are-overpaying-for-life-insurance-by-36.
• “Life Insurance Through Work Benefits: Does It Provide a False Sense of Security?” PolicyMe, Jan. 2023, www.policyme.com/blog/life-insurance-through-work-benefits.
• Rendaje, Michelle. “12+ Must-Read Canadian Life Insurance Statistics [Updated in 2023].” Reviewlution, 30 Mar. 2023, reviewlution.ca/resources/canadian-life-insurance-statistics.
• Canadian Life and health insurance Association. Canadian Life and Health Insurance Association - Canadian Life and Health Insurance Facts, 2022 Edition. www.clhia.uberflip.com/i/1478447-canadian-life-and-health-insurance-facts-2022-edition/3.
• “Canadian Facts About Life 2019.” Life Insurance and Marketing Research Association, Sept. 2019, www.limra.com/siteassets/newsroom/fact-tank/fact-sheets/limras-facts-about-life-life insurance-canada-2019.pdf.