Manulife Canada is urging Canadians to review their life insurance coverage ahead of National Insurance Awareness Day on June 28, as industry data shows financial protection falling out of step with household obligations across the country.
The call comes as a widening structural gap opens between total coverage in force and what Canadian households actually need. A study from Toronto-based MyChoice, drawing on Statistics Canada, CMHC and Canadian Life and Health Insurance Association data, found that Canadian households are underinsured by an average of 14.5%, even as total life insurance coverage nationwide has reached record levels.
The average household should carry roughly $595,000 in coverage but holds approximately $509,000, with Ontario showing the largest provincial shortfall: households there need close to $794,000 but hold about $552,000, a gap of more than 30%.
The coverage gap is not simply a product of population growth outpacing sales. It reflects a structural shift in how and to whom life insurance is being sold. Term policy sales in Canada dropped from 397,000 in 2019 to 340,000 in 2024, while 56% of 2024 premium sales were participating whole life policies, indicating a shift toward higher-end products. Premium revenue holds, but the market is reaching fewer households.
The rate of individual life insurance policies sold per 1,000 people in Canada fell from 21.7 in 2010 to 15.3 in 2024, even as Canada's population grew from 33.8 million to 41.5 million over the same period, according to data compiled by Insurance Portal and LIMRA. The gap is not evenly distributed. Gen Z shows a 44% need gap, more than double that of Baby Boomers, while women carry a 32% insurance need gap compared to 28% for men.
A key structural driver of the gap is the erosion of employer-sponsored coverage as Canada's workforce composition changes.
According to Statistics Canada, approximately 28% of Canadians, roughly 8.7 million adults, engage in some form of gig work, with 62% relying on gig income either as a supplement or as their primary earnings source. More than one in five gig workers reported having no health or life insurance of any form, and in 2025, 59% of Canadians obtained life insurance through employer-supported group plans, a figure that has declined as remote and contract work expanded.
Pamela Wong, head of affinity at Manulife Canada, said: "Canadians aren't experiencing life in a straight line. As people move between jobs, explore entrepreneurship, or plan for what's next, it's important they have options that help them stay protected along the way."
The timing of Manulife's awareness push intersects with one of the most significant near-term distribution opportunities the Canadian life insurance market has seen in years. More than 1.2 million mortgages renewed in 2025, creating a natural entry point for term insurance conversations.
The renewal cycle continues into 2026: over the next 12 months, the last of the five-year fixed-payment mortgages taken out during the pandemic will renew, representing about 12% of all outstanding mortgages in Canada, with those borrowers expected to see payments increase by about 15% on average, according to the Bank of Canada's 2026 Financial Stability Report.
Rising mortgage payments increase households' financial vulnerability at precisely the moment when term insurance conversations are most productive. Mortgage debt is identified as the primary driver of the household coverage gap, according to MyChoice's analysis.
Despite the documented gap, conversion remains the industry's central challenge. A 2025 study by PolicyMe and Angus Reid found that nearly two in three uninsured Canadians said they were unlikely to get life insurance in the next five years, with 34% citing cost as the primary barrier, rising to 42% among parents with children at home.
Only 32% of Canadians trust their insurer, according to data cited at the 2025 Canadian Reinsurance Conference, a level that industry participants from Manulife, RGA and LIMRA identified as actively suppressing adoption.
