Insurtech company MyChoice has found through its research that Canadians are increasingly underinsured, thanks to rising (soaring) household debt and housing costs.
“Canada’s financial vulnerability continues to deepen as household debt stays elevated, real estate remains historically expensive and savings growth fails to keep pace with liabilities,” they write in the note summarizing their research, Canada’s Life Insurance Gap Widens in 2025.
The company analyzed the latest publicly available, provincial level data on household income, mortgage and non-mortgage debt, pension and non-pension assets from Statistics Canada and Canada and Mortgage Housing Corporation (CMHC). This was then compared to the actual life insurance coverage per household, reported by the Canadian Life and Health Insurance Association (CLHIA).
“Households in Ontario, Alberta, British Columbia, Quebec and much of Atlantic Canada are now more underinsured than ever, despite rising incomes,” they state. Only Manitoba and Nova Scotia reported coverage gaps under two per cent and Saskatchewan clients appear to be overinsured for their circumstances, while the insurance gap or shortfall percentages are in the double digits for all other provinces.
“Nationally, the average recommended coverage is about $595,000, while the average actual coverage is $509,000, leaving a 14.5 per cent protection shortfall across Canada,” they write.
“Many Canadians believe they are adequately insured, but the numbers simply don’t support that claim,” says MyChoice CEO, Aren Mirzaian. “With rising household debt and other pressures, such as a softening job market, the average household is now further from sufficient coverage than it was even five years ago.”
