I was recently on a panel at the 2025 Canadian Reinsurance Conference, speaking about consumer trends in life insurance. A recurring theme of the conference was the fact that many Canadians are under-insured: carrying too little life insurance or none at all.
Recent data released by LIMRA points out that for the fourth year in a row, while the value of new insurance policies issued has increased, the number of policies issued to Canadians has continued to fall. Our own Canadian Financial Values survey show that between 2016 and 2025, the proportion of Canadians aged 18+ with individual life insurance fell from 40% to 31%, and the proportion with employer-sponsored group life and/or health benefits declined from 52% to 45%.
Fortunately, some groups who need insurance the most – such as those with dependent children and those who own a home with a mortgage – have some of the highest rates of life insurance coverage. Still, significant proportions are uninsured or insufficiently insured.
Demographic factors
Part of the decline in insurance use is driven by demographics. More Canadians are now aged 65+, and a greater share of this population have decided that life insurance is no longer necessary for them. At the opposite end of the spectrum, younger generations are hitting typical insurance triggers — such as getting married, having children, or purchasing a home — later in life, in part because it takes longer to cover the costs of post-secondary education and saving for a down payment on a home. However, our data shows that those aged 50-64 report the steepest declines in individual life insurance – and in group life as well. The changing nature of work and competing demands for their money and attention may be factors.The defining Social Values of Alert included high scores on Financial Concern for the future (not surprisingly), Technological Anxiety, and Aversion To Complexity, as well as low scores for Saving On Principle. These values made intuitive sense for a segment who reported that they worried about making ends meet from month to month, that their financial situation in the past year had gotten worse, and that they were pessimistic that things would improve in the coming year.
Overreliance on group life insurance
There’s another layer contributing to declining insurance uptake: the widespread myth that employer-sponsored group insurance provides sufficient coverage.
Among those working full-time, three-quarters have life insurance – two-thirds participate in group life and/or health plans, while one-third have bought individual life policies (these are overlapping segments – one third who have group life/health plans also have individual insurance, while one-third not in group plans have individual life insurance). Not surprisingly, there is a correlation between household income and insurance ownership – only 36% of those with household incomes below $50,000 have access to life insurance through individual or group plans, as compared to 85% among those with incomes of $150,000 or more. But most of this difference across income groups is explained by higher earners’ better access to group life/health plans: 15% of the lower-income earners have access while 71% of the highest earners do. Since most group plans only pay a multiple of one or two times salary, for most working Canadians this coverage is woefully inadequate to replace their incomes for 10 or 20 of their working years should they pass away prematurely.
Social Values driving individual life insurance purchase
Environics Social Values data provides unique insights into Canadians’ insurance purchasing behaviour. Those who have individual life insurance are thoughtful, forward-planning people. They are strong on values associated with Personal Control, Personal Challenge, Adaptability to Complexity, and Vitality. Not surprisingly, given that people don’t buy life insurance for their own personal benefit, they score very high on Primacy of the Family. Their top scoring value, Legacy, indicates they are very mindful of taking care of their loved ones when they are gone. Those with no life insurance are defined by values such as Aversion to Complexity, Fatalism and Technological Anxiety. They also score low on Financial Security, suggesting that their focus on immediate needs may make them think insurance is unaffordable.
Key takeaways
Consumer education is key – Canadians should take greater steps to learn about the risks they and their loved ones are facing by being under-insured. A common concern is that insurance is expensive, but an insurance provider’s online calculator shows a healthy 35-year-old non-smoking woman can obtain a 20-year term policy for $1,000,000 for about $40 a month – a small price compared to the peace of mind it can provide.
Comprehensive financial planning should always include an assessment of insurance needs, and those working with an advisor tend to have greater insurance coverage. Group plan sponsors who administer group benefits plans for their organizations can also play a role, reminding employees that their group life insurance provides a foundation, but is not the complete solution in most cases.
