Record life insurance coverage hides a growing gap for Canadian households, with Ontario facing the largest shortfall

Read more: 3 essential money moves to make once you’ve saved $50,000

Ontario’s gap is the widest in the country

The widest gap is held by mortgage holders and those with life insurance coverage and living in Ontario. The Ontario shortfall, which is more than 30% of total debt, is the largest in the nation, followed by Quebec (at 25%) and Alberta (at 21%). Despite high housing prices, British Columbia residents are underinsured by just over 16%, while Manitoba and Nova Scotia are close to balanced, with average coverage roughly matching estimated need, according to data published in the Insurance Business of Canada (1).

Starov attributes Ontario’s gap largely to the province carrying the highest average mortgage balances in the country, amplified by rising non-mortgage debt and higher average salaries. For a household carrying a seven-figure mortgage in the Greater Toronto Area or Ottawa, that shortfall can be the difference between a family staying in their home after an unexpected death and having to sell.

It can be overwhelming trying to balance the right coverage and a manageable premium. But it doesn’t have to be complicated. An easy way to compare premiums is to shop online. For instance, BlueCross can help protect what matters most with coverage starting at $15 per month. Blue Cross Life offers flexible term options (ranging from 10 to 30 years) with pricing that’s on par or better than digital insurers — and lower than most traditional providers. Use their 100% online application to get approved in just 20 minutes, usually without a medical exam.

The mortgage renewal wave makes this the moment to check

More than 1.2 million Canadian mortgages were renewed in 2025, and the renewal wave is expected to continue into 2026 (2). For homeowners whose life insurance was purchased when their mortgage balance — or their income — looked different, a renewal is a natural trigger to revisit coverage.

And the stakes are real. Canada’s life and health insurers paid out $18.6 billion in life insurance benefits in 2024, including $8.9 billion in death benefits (3). Life insurance remains one of the most direct ways to keep a mortgage from becoming an unmanageable burden for survivors.

How to tell if your coverage is enough

To determine if you have enough life insurance coverage, you need to start with the math, not the premium. Add up your outstanding mortgage balance, other debts and 5 to 10 years of income replacement, then compare that total against your current death benefit.

For example, if a homeowner carrying a $550,000 mortgage, $30,000 in consumer debt and an annual household income of $90,000 might reasonably target 5 to 10 years of income replacement — pushing total coverage need above $900,000 once the mortgage and other debts are combined. That means a $500,000 policy that felt generous a decade ago could now cover barely half of what that household actually needs.

If your policy hasn’t been reviewed in three years or more, a review — not necessarily a new purchase — is often the right first step. In some cases, reallocating coverage between partners or adjusting term length can reduce a gap without a large increase in premiums.

Comparing quotes through a licensed broker can confirm whether closing the gap costs as little as most Canadians assume.

Ready for peace of mind? It’s worth considering how your family would manage without you around. To get a clear picture use a quick online calculator to estimate your actual coverage needs and see how a tailored life insurance policy can give you peace of mind and comfortably fit your budget. For instance, in just a few minutes you can get a free, no-obligation online quote with PolicyMe. Get coverage from the comfort of your home with PolicyMe’s instant online decision — making it easier to secure your financial safety net.

What to do now

Add up your outstanding mortgage balance, other debts and 5 to 10 years of income replacement, then compare that total against your current death benefit

If your policy has not been reviewed in 3 years or more, request a review — a mortgage renewal, salary increase or new child can change what you need

If you rely mainly on employer group life insurance, remember it typically ends when your job does — the national average of $509,000 in personal coverage may not fill that gap on its own

Compare quotes through a licensed broker if the math shows you are underinsured

A decision worth making before renewal, not after

A life insurance gap doesn’t resolve itself. It compounds quietly every time a mortgage grows, a raise arrives or a policy sits untouched. A mortgage renewal, a new child or a job change is as good a prompt as any to run the numbers again — before a shortfall becomes someone else’s problem to solve. This isn’t a case for buying the biggest policy available; it’s a case for making sure the size of the policy matches the size of the obligation. For most Canadians, that’s a five-minute calculation, not a five-figure decision.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

Insurance Business Magazine (1); Newswire (2); Edge (3)

This article originally appeared on Money.ca under the title: Record life insurance coverage hides a growing gap for Canadian households, with Ontario facing the largest shortfall

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.