The report shows some positives compared to the previous year’s analysis, but there are some concerning details, mainly regarding affordability and consumer confidence.
More Canadians have life insurance, but coverage isn’t even
Let’s start with some positive data from the report. More Canadians now have at least one type of life insurance policy. The PolicyMe study revealed that 68% of Canadians have some kind of life insurance coverage, which is up from 58% in 2025. Half of those insured Canadians get their life insurance coverage through a workplace plan.
The biggest gains in coverage from all survey respondents were for Gen Z, whose coverage rose 28% over the previous year. As this younger generation starts hitting lifestyle milestones, many are finding that life insurance is a necessity. Adults between the ages of 18 and 34 saw the next-biggest gain in coverage (19%).
While those are broad improvements in coverage, there are still significant differences based on household income. The report shows that life insurance coverage for households earning less than $50,000 a year is up 16%. That’s a noticeable improvement, but half of these households still lack any type of life insurance, while households making $100,000 or more are covered at a rate of 79%.
There are regional differences to coverage, as well. Uninsured rates were highest in British Columbia where 39% of all residents lack any kind of life insurance policy. Compare this to Atlantic Canada, where 28% lack coverage.
Barriers to purchasing life insurance
The PolicyMe study asked respondents without coverage why they hadn’t purchased a policy. Affordability was the biggest factor—30% said cost was prohibitive. Of respondents, 15% said they had planned to purchase coverage, but that rising living costs had delayed their plans.
The report showed some of the smallest gains in coverage in households with children. Only 20% of homes with kids have some type of life insurance policy, which is up just 4% from 2025. When asked, almost half of these respondents said cost was the reason they didn’t have life insurance. As families struggle with higher cost of living, it’s impacting their financial preparedness in a way that households without children aren’t experiencing.
Affordability isn’t the only reason people forgo coverage. A little over 1 in 4 adults (26%) said they didn’t have financial obligations, debts, or dependents that would make a life insurance payout important. Another 19% said they hadn’t thought about purchasing life insurance at all.
Major milestones nudge Canadians to purchase coverage
Over half of respondents said nothing would make them likely to purchase a policy within the next five years, so what are the catalysts for purchasing coverage?
The higher rates of life insurance among younger generations points to one of the most compelling reasons to buy a policy: protection for their families. Almost 4 out of 5 people (79%) said that their family’s well-being was a motivating factor in applying for life insurance.
Big milestones like buying a home, putting dependents through university, or caring for aging relatives can add financial pressure. Many see life insurance as a way to protect their families from financial burdens after they pass.
Related reading: Do I really need life insurance?
Higher coverage rates don’t mean increased confidence
This year’s study shows an improvement in life insurance coverage, but confidence levels stayed about the same as the year before. One in four Canadians (24%) aren’t confident that their families would be financially secure if they passed away unexpectedly. This is down from 25% the year before.
Households with kids are even more unsure that their finances won’t burden their families; 30% reported a lack of confidence, a 9% increase over those without children. Remember, taking care of dependents is a major catalyst for purchasing a policy in the first place.
Given that half of Canadians with life insurance get it through their workplace, it’s worth taking a closer look at coverage amounts, too. The most commonly reported workplace policy was between $100,000 and $299,999. As the cost of living continues to increase, Canadians are concerned that their life insurance policies don’t provide enough coverage—and 26% of those with workplace coverage don’t even know how much they have.
The bottom line
Having a life insurance policy isn’t enough if you don’t have the right coverage or know what your policy entails. “Having a policy isn’t the same as feeling secure,” said Andrew Ostro, CEO of PolicyMe. “It’s worth taking a few minutes to check whether your coverage is enough, rather than assuming it is, especially if your primary source of life insurance is employer-based coverage.”
