A new report finds one in four Canadians still doubts their family would be financially secure if they died unexpectedly
More Canadians than ever hold life insurance, but a persistent gap between having a policy and feeling protected by it is raising fresh concerns about the quality and adequacy of that coverage, according to new research.
PolicyMe, a Toronto-based digital insurance distributor, published the second annual edition of its Life Insurance Gap Report in partnership with Angus Reid on September 1, 2026, drawing on an online survey of 1,517 Canadian adults conducted August 6–11, 2026. The findings land as September marks Life Insurance Awareness Month.
Two in three Canadians (68 per cent) reported holding at least one form of life insurance, a 10-percentage-point rise from the 2025 figure, but despite that upswing, nearly one in four Canadians (24 per cent) said they were either not confident or unsure that their family would be financially secure if they were to die suddenly.
For those with children at home, that unease was even more pronounced: 30 per cent expressed doubt about their family's financial protection, nine points higher than those without children in the household.
"It's encouraging to see more Canadians securing life insurance this past year, especially younger Canadians who are getting coverage at a much higher rate than previous years," said Andrew Ostro, CEO and co-founder of PolicyMe. "But having a policy isn't the same as feeling secure."
Younger Canadians driving the uptick
Coverage among Canadians aged 18 to 34 climbed from 48 per cent to 67 per cent year over year, while Gen Z specifically saw coverage jump from 30 per cent to 58 per cent.
The report suggests the trend may reflect more young Canadians reaching milestones such as homeownership or starting a family, both of which historically prompt insurance purchases.
PolicyMe's own internal data showed that 42 per cent of term life applications in the first quarter of 2026 cited a mortgage as a motivating factor, and 79 per cent cited family well-being.
Regional disparities also emerged. Uninsured rates were highest in British Columbia, where 39 per cent of respondents said they lacked any coverage, compared with just 28 per cent in Atlantic Canada.
The workplace coverage problem
Much of the coverage increase appears tied to group benefits plans, and that, the report suggests, may explain why confidence has not kept pace with the headline numbers.
Half of insured Canadians rely on workplace plans as their primary or sole source of life insurance. Among those, 26 per cent did not know how much coverage they actually held, and the most commonly reported benefit range was $100,000 to $299,999, a sum that may fall well short of what is needed to pay down a mortgage or support dependents into adulthood.
Among Canadians earning $100,000 or more annually, 79 per cent reported holding coverage. That figure dropped to 50 per cent for those earning under $50,000.
Cost cited as top barrier, but not the only one
Among those without coverage, affordability was the most frequently cited obstacle, with 30 per cent naming cost as a reason for remaining uninsured.
A quarter (26 per cent) said they had no debts, dependants, or other financial obligations that would justify a policy, while 19 per cent said they simply had not thought about it.
Rising living costs appear to be deepening the reluctance: 15 per cent said increased day-to-day expenses had pushed their plans to buy further out, up from 10 per cent in 2025. Among uninsured parents, cost was even more salient, cited by 48 per cent.
Perhaps most strikingly, 51 per cent of uninsured respondents said nothing would make them likely to purchase coverage within the next five years.
One in three Canadians is already weighing cuts to existing insurance despite ongoing coverage gaps, a separate survey found earlier this year, suggesting that the cost-versus-coverage tension is not confined to those who are currently uninsured.
What advisors can take from this
The data carries an implicit message for financial advisors working with clients who may be over-reliant on employer-sponsored plans.
Group benefits are a starting point, not a comprehensive solution, and the 26 per cent of workplace plan members who do not know what they are covered for represent a significant advisory opportunity.
Mortgage debt continues to drive Canadians toward purchasing more life insurance, according to separate data published earlier in 2026, and the findings align with PolicyMe's own internal snapshot showing mortgages as the second most common motivator behind term life applications this year.
