In a startling revelation, nearly half of Canadians are skipping life insurance, leaving their families vulnerable to financial ruin.
A recent survey conducted by PolicyMe and Angus Reid in September 2025 uncovers the alarming reasons behind this trend, with affordability, misconceptions, and distrust topping the list.
As living costs soar and economic pressures mount, the decision to forgo life insurance is becoming a risky gamble for millions.
But what’s driving this choice, and how can Canadians protect their loved ones without breaking the bank?
Let’s dive into the eye-opening findings and explore actionable solutions for securing your family’s future.
Table of Contents
The Growing Trend: Canadians Are Saying No to Life Insurance
According to the PolicyMe and Angus Reid survey, a staggering 42% of Canadians either lack life insurance or are unsure if they have it.
Even more concerning, 49% have no plans to purchase coverage in the next five years.
This trend isn’t limited to single individuals—families with children are also opting out, putting their financial stability at risk.
Andrew Ostro, CEO of PolicyMe, highlights affordability as the primary barrier.
“Our survey found that 34% of uninsured Canadians cite high costs as the main reason for skipping life insurance, and this figure rises to 42% among households with children,” Ostro explains.
With life insurance premiums in Canada ranging from $15 to $300 per month depending on the policy, the expense can feel daunting for families already stretched thin by rising living costs.
For example, a 40-year-old non-smoking woman seeking $500,000 in coverage for a 20-year term policy might pay $33.27 monthly, while a man of the same age could face $44.96.
While these figures may seem manageable for some, the perception of unaffordability is keeping many from taking the plunge.
Why Are Canadians Skipping Life Insurance?
Beyond cost, several factors are contributing to this alarming trend:
High Cost of Living: One in 10 Canadians (10%) report that skyrocketing living expenses have forced them to delay purchasing life insurance.
With inflation driving up the cost of groceries, housing, and utilities, many families are prioritizing immediate needs over long-term financial planning.
Misconceptions About Necessity: A surprising 27% of Canadians believe they don’t need life insurance at all.
This mindset is particularly prevalent among younger individuals or those without dependents, who may not yet grasp the importance of securing their family’s future.
Distrust in Insurance Companies: A significant 21% of Canadians believe that insurers pay out only half of claims or less.
In reality, the payout rate for life insurance claims in Canada is closer to 99%, according to Ostro.
This disconnect points to a trust gap that insurance providers must address through greater transparency.
Medical Test Barriers: For 26% of respondents, the requirement for medical exams is a deterrent.
Many are unaware that individuals with health concerns can still qualify for coverage, as noted by Michael Aziz, vice-president at Foresters Financial Canada.
“Canadians with health issues may not realize they’re still eligible for life insurance,” Aziz says.
The Risks of Going Uninsured
Skipping life insurance isn’t just a personal choice—it’s a decision that could have devastating consequences for your loved ones.
Ostro warns, “One in four Canadians lacks confidence that their families would be financially secure if they passed away unexpectedly.
Living paycheck to paycheck, carrying high debt, or managing rising household costs leaves little room for savings.”
For families with dependents, the stakes are even higher. Certified financial planner Jason Evans emphasizes the critical role of life insurance for parents.
“If anyone relies on your income, the absence of life insurance could lead to dire outcomes like losing the family home, relocating, or even bankruptcy,” he says.
Evans also advises acting early: “Buying life insurance when you’re young and healthy locks in lower premiums.
If a serious health condition develops, you may face higher costs or be unable to qualify at all.”
The Cost of Waiting: Premiums Are Rising
Delaying life insurance isn’t just risky—it’s expensive.
Ostro notes that premiums increase by approximately 8% each year as you age.
For families already grappling with financial strain, waiting could make coverage even less affordable in the future.
This creates a vicious cycle where procrastination leads to higher costs, further discouraging Canadians from securing coverage.
Term vs. Whole Life Insurance: What’s the Difference?
For those concerned about costs, understanding the difference between term life and whole life insurance is crucial.
Here’s a breakdown:
Term Life Insurance: This type of policy covers you for a specific period, such as 10, 20, or 30 years.
It’s significantly cheaper, with premiums often a fraction of whole life policies.
However, if you outlive the term, your beneficiaries receive no payout.
Term life is ideal for those seeking affordable protection for their dependents during key years, such as while raising children or paying off a mortgage.
Whole Life Insurance: As the name suggests, this policy provides lifelong coverage and often includes investment or cash value features.
While it offers more comprehensive protection, the premiums can be several times higher than term life insurance.
Ostro advises, “For families looking to protect their dependents at the most affordable price, choosing the right product is key.
Term life insurance offers a cost-effective solution for those on a budget.”Evans adds, “Even a small term policy is better than no coverage at all.
You can increase coverage later as your financial situation improves.”
Addressing the Trust Gap
The misconception that insurers rarely pay out claims is a significant barrier.
Ostro stresses the need for greater transparency in the industry: “Insurers must clearly communicate that the payout rate is nearly 99% and simplify the claims process to build trust.”
Education is also critical.
Many Canadians are unaware of the flexibility in life insurance options, such as policies that don’t require extensive medical exams or coverage tailored to specific needs.
By addressing these misconceptions, insurers can encourage more people to take the first step toward financial security.
Practical Tips for Affording Life Insurance
If you’re hesitant about life insurance due to cost, here are some strategies to make it more manageable:
Start Small: A modest term life policy is better than none.
You can always increase coverage as your budget allows.
Shop Around: Compare quotes from multiple insurers to find the best rates.
Online platforms like PolicyMe make it easy to explore options tailored to your needs.
Check Employer Benefits: Some employers offer group life insurance, which can be a cost-effective starting point.
However, Evans cautions that group plans often have limitations and may not provide sufficient coverage on their own.
Buy Early: Locking in coverage when you’re young and healthy ensures lower premiums and protects against future health-related barriers.
Understand Your Needs: Work with a financial planner to determine the right coverage amount and policy type for your family’s unique situation.
Why Life Insurance Matters Now More Than Ever
In an era of economic uncertainty, life insurance is a critical safety net.
The PolicyMe survey reveals that 65% of uninsured Canadians are unlikely to purchase coverage in the next five years, a decision that could leave their families exposed to financial hardship.
With rising costs and unpredictable events, securing life insurance is no longer optional—it’s essential.
Evans sums it up: “Life insurance is about peace of mind.
It ensures that your loved ones can maintain their quality of life, even if the unexpected happens.”
The decision to skip life insurance may seem like a way to save money in the short term, but it’s a gamble that could cost your family dearly.
By understanding your options, addressing misconceptions, and taking advantage of affordable policies, you can protect your loved ones without breaking the bank.
Don’t wait until it’s too late.
Your family’s financial future depends on it.
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