How much life insurance do Canadians actually need?

Most Canadians know they should have life insurance. Far fewer actually do. Below are real, current answers to the most common questions Canadians ask about coverage, cost, and how much protection their family really needs -- based on independent research and industry data from neutral sources.

How many Canadians don't have life insurance?

How much life insurance do I need?

A common starting point is 10 times your annual income, adjusted for your mortgage balance, any other debts, and final expenses you'd want covered. According to the Canadian Life and Health Insurance Association, the average Canadian household held $509,000 in life insurance coverage in 2024 -- up from $483,000 the year before -- which suggests awareness of the need is growing.

The right number depends on your specific situation. A licensed agent will look at your income, your debts, your family's needs, and your goals before recommending a coverage amount.

• Income replacement -- how many years of income would your family need if you were gone?
• Debt coverage -- mortgage balance, car loans, lines of credit
• Final expenses -- funeral and end-of-life costs typically run $10,000 to $25,000 in Canada

How much does life insurance cost in Canada?

Cost is driven by age, health, smoking status, coverage amount, and term length. According to LIMRA's 2025 data, the average annual premium per individual life insurance policy in Canada was $3,209 -- or roughly $267 per month. That's across all policy types and all ages.

For a healthy non-smoker in their 30s, term life coverage can cost significantly less. The single biggest factor you can control is timing -- the younger and healthier you are when you lock in, the lower your rate for the entire term.

Is it better to buy life insurance through an agent?

Term life vs whole life insurance in Canada

Term life insurance covers you for a set period -- typically 10 to 30 years -- and is the most affordable option for income replacement and debt coverage during the years your family needs it most. According to LIMRA, term life made up 51% of individual policies sold in Canada in 2025, making it the most common choice for families seeking straightforward protection.

Whole life insurance lasts your entire life and builds cash value over time, making it more expensive but useful for permanent needs like estate planning. Most Canadians looking for family protection start with term coverage, then explore permanent options as their financial picture evolves.

Why do so many Canadians go without coverage?

The 2025 Angus Reid survey found that 42% of Canadians either don't have life insurance or aren't sure whether they do. LIMRA confirms a 30% coverage gap among Canadian adults. The most commonly cited reasons are cost concerns and simply not getting around to it -- the same pattern year after year.

The delay is understandable. Life gets busy. It's not a comfortable topic. But every year you wait, your premiums go up and the window for preferred pricing narrows. The best time to get coverage is when you're young and healthy. The second best time is now.

How much did Canadian insurers pay out in 2024?