The Chronically Under-Insured: Canadian Life Insurance Coverage Gaps

Why Millions of Canadians Are Still Missing the Mark on Life Insurance Protection

Despite living in one of the most developed and financially secure countries in the world, many Canadians are still falling short when it comes to protecting their families with proper life insurance coverage. It’s something I see more often than not—people who genuinely want to provide for their loved ones, but who haven’t taken the steps to ensure that their life insurance plan reflects their actual needs.

Here’s the thing: life insurance in Canada isn’t just a product—it’s a financial foundation. And yet, nearly one in three Canadian adults—an estimated 8.4 million people—admit they need more coverage. That’s a pretty big gap, and the reasons behind it are more relatable than you might think.

Whether it’s the perception that premiums are too expensive, or simply the fact that life insurance often takes a backseat to more immediate financial priorities, the reality is that too many families are left vulnerable. Let’s look at what’s really going on, and what you can do to make sure you’re not one of the millions left underprotected.

Why Are So Many Canadians Under-Insured?

First off, let’s talk about the elephant in the room—money. For a lot of households, especially with rising living costs, life insurance just doesn’t feel urgent. Mortgage payments, groceries, child care, saving for retirement… it all adds up. Life insurance? It’s often the “I’ll get to it later” task.

But here’s the surprising part: over a third of Canadians think life insurance costs three times more than it actually does. That means many people are walking away from a solution they can afford—simply because they believe they can’t. It’s not a lack of willingness, it’s a lack of accurate information.

And it’s not just the uninsured. Many people who do have coverage through work or personal policies may still fall into the underinsured category. Group life insurance from your employer is a great start, but it’s often only one or two times your salary—which typically isn’t enough to replace income for more than a year or two, let alone cover debts, living expenses, education costs, or final expenses.

Over 8 million Canadians are walking around knowing they need more life insurance—but aren’t sure how to close the gap. For most, it’s not about neglect. It’s about not having the right information, or assuming it’s out of reach financially.

The Hidden Risks of Being Underinsured

Let’s be honest—thinking about life insurance isn’t exactly anyone’s idea of a good time. But the consequences of not thinking about it are much worse. Being underinsured doesn’t just impact your family if the worst happens. It also adds stress during life’s most difficult moments.

I’ve seen families forced to make tough decisions, like downsizing their home or dipping into retirement savings just to get by. And the hardest part? Many of these situations could have been avoided with the right life insurance plan in place. It’s not about over-insuring or spending a fortune—it’s about making sure the coverage you do have matches your real-life responsibilities.

Why This Is a Canada-Wide Issue

Life insurance in Canada has never been more available. We’ve seen a steady rise in premium revenues, which tells us that more people are buying coverage. But here’s the catch: that doesn’t mean everyone is getting the right coverage.

Too often, people choose the easiest or cheapest option—maybe a small term policy or something bundled through their bank—and then check it off the to-do list. But when your family is relying on that plan to cover 10, 20, or 30 years of lost income, that shortcut can become a real problem.

There’s also a growing number of self-employed Canadians, gig workers, and small business owners who don’t have access to group benefits. These individuals often go without life insurance entirely because they assume the costs are too high or the application process is too complicated.

So, What’s the Solution?

Education is the first step. If more people knew how life insurance in Canada really works—and how surprisingly affordable it can be—they’d be better equipped to make confident decisions. It’s why I always recommend a quick review with an advisor, even if it’s just to confirm what you already have in place.

For example, a healthy 35-year-old can often get $500,000 of 20-year term life insurance for less than the cost of a streaming subscription. That’s peace of mind for your family, for less than you’re paying for movies or coffee.

It’s also important to remember that not all life insurance is created equal. The right policy depends on your age, health, family size, debts, and long-term goals. Life insurance should evolve with your life—just like your financial plan does.

Final Thoughts

There’s no one-size-fits-all answer when it comes to life insurance in Canada. But one thing is clear: too many Canadians are underestimating both the importance and the affordability of proper coverage. If you haven’t reviewed your policy lately—or if you’re not sure whether what you have is enough—it’s worth taking a closer look.

The good news? You don’t need to make any drastic changes overnight. But even a small step—like having a conversation with an advisor or getting a free quote—can bring you closer to a more secure future.

Life insurance is ultimately about love. It’s about making sure your family is okay, even if you’re not there to provide. And while it might not feel urgent today, the peace of mind it brings is something you’ll never regret.

Need help reviewing your current policy—or figuring out where to start? Let’s chat. It’s what I’m here for.