Rising Living Costs Leave Canadians Underinsured: How Families Can Close the Gap

As **household budgets tighten**, many Canadians are **foregoing life insurance**, leaving families vulnerable to financial hardship in the event of unexpected death. With **affordability, medical requirements, and mistrust of insurers** being the main barriers, younger Canadians and those with children are particularly at risk. In this blog, we’ll explore the survey findings and provide actionable steps for Canadians to **protect their families and close the life insurance gap**.

## **How Many Canadians Are Underinsured?** The survey found that: - **42% of Canadians** do not have life insurance or are unsure if they are covered. - Among those insured: - **37%** hold group benefits through their employer. - **15%** have individual term life insurance. - **8%** rely on mortgage life insurance. - **2%** have other forms of coverage. **Why it matters:** Affordability pressures are leaving families unprotected, especially when high living costs coincide with growing household responsibilities.

## **Affordability Challenges** Affordability is a central factor in the coverage gap: - **34% of uninsured Canadians** say coverage is too expensive. - **42% of these individuals have children at home**, highlighting the risk to families. - Another **10% cite high living costs** as a reason for delaying insurance purchase. - Life insurance costs generally **increase about 8% per year of age**, adding pressure for older applicants.

**Tip:** Even if a full policy feels expensive, Canadians can **choose lower coverage amounts or shorter term policies** to secure essential protection for their families. ## **The Confidence Divide: Insured vs. Uninsured** - Among insured Canadians, **80% are confident** their family would be financially secure if they died unexpectedly. - Among uninsured Canadians, **25% are unsure or lack confidence** in their family’s financial security. This stark contrast underscores the **importance of life insurance** in providing peace of mind and safeguarding loved ones.

## **Barriers Beyond Cost** ### **1. Medical Requirements** - **26% of respondents** say medical testing makes them less likely to purchase insurance. - Among those considering coverage in the next five years, **37% report medical tests as a deterrent**. **Tip:** Many policies allow applicants to complete **simplified medical questionnaires** or “no blood test” options, especially for standard term life coverage. Those with prior conditions should carefully consider blood tests, as they may **qualify for lower rates**. ### **2.

Mistrust of Insurers** - **21% of Canadians** believe insurers pay half or fewer of life insurance claims. - Industry data shows **claims payout rates of 99% in Canada**. **Tip:** Work with **reputable insurance providers** who offer transparency, clear guidance, and customer support throughout the application and claims process. ## **Regional Insights** The report also highlighted **regional variations**: - **British Columbia**: Highest proportion of uninsured or unsure residents (**50%**). - **Atlantic Canada**: Lowest confidence in financial security (**23%**) among uninsured residents.

This indicates that **local awareness and education campaigns** about life insurance may be particularly important in certain regions. ## **How Canadians Can Close the Life Insurance Gap** - **Assess Your Coverage Needs**** ** - Calculate debts, household expenses, and future financial goals. - Determine the type and amount of coverage your family truly needs. - **Explore Affordable Options**** ** - Consider **term life insurance** or **simplified application policies**. - Lower coverage or shorter terms can still **protect essential expenses**.

- **Don’t Rely Solely on Workplace Insurance**** ** - Employer coverage may **not be sufficient** to cover your family’s lifestyle needs. - Mortgage insurance often only covers outstanding debts, not living expenses. - **Take Advantage of Digital Tools**** ** - Many providers, including **Insure Me Right**, offer **online applications, quotes, and guidance**. - Digital tools simplify coverage selection and reduce the barriers of paperwork or in-person appointments. - **Educate Yourself About Insurance Realities**** ** - Understand that **most claims are paid in full** in Canada.

- Don’t let myths about insurer payout rates prevent you from protecting your family. ## **Conclusion** Rising living costs and misconceptions about life insurance are leaving many Canadian families **underinsured and unprotected**. However, **affordable and accessible options exist** for Canadians of all ages and income levels. By **assessing your needs, exploring coverage options, and working with a trusted provider like Insure Me Right**, you can close the life insurance gap and ensure **financial security for your loved ones**.

Get your life insurance quote today with Insure Me Right and protect your family’s future.