To address this critical issue, MyChoice, a leading insurance comparison platform in Canada, conducted a study to analyze the adequacy of life insurance coverage across Canadian provinces. To provide a comprehensive estimate of the life insurance coverage required for Canadian households, the team at MyChoice analyzed both household income and financial asset data across all the provinces. The team then compared the “recommended coverage” amount with the average coverage per insured household in each province as outlined by the CLHIA.
MyChoice’s findings reveal a troubling trend – people in BC, Ontario, Alberta, Quebec and Newfoundland don’t have enough life insurance to cover their expenses. In British Columbia, households are under-insured by 27.5%, and in Ontario, by 23.6%. Even in Alberta, which has a higher average income, families are under-covered by 19.4%. On the other hand, provinces like Manitoba and Nova Scotia fare better, with minimal coverage gaps or even slight over-insurance. However, the national picture remains concerning: the average Canadian household may not be adequately prepared to handle their financial obligations in the event of an unexpected death.
For example, in British Columbia, where the cost of living is particularly high, the average needed coverage is $704,700, yet households are insured for only $511,000, leaving a gap of $193,700. Similarly, in Ontario, the required life insurance amount is $659,600, but the average coverage is $504,000, resulting in a shortfall of $155,600.
To view the complete table of provinces with calculations and methodology, visit the MyChoice study at: https://www.mychoice.ca/blog/life-insurance-coverage-analysis-canada/
Aren Mirzaian, CEO of MyChoice, emphasizes the importance of reviewing life insurance policies: “Many Canadian families are unaware that their current life insurance policies may not provide enough protection, especially with the rising costs of living and increasing mortgage debt,” says Mirzaian. “It’s crucial to regularly reassess your coverage to ensure that your family is fully protected financially. Life insurance is not just about covering your mortgage – it’s about securing your family’s future and providing peace of mind during difficult times.”
About MyChoice
MyChoice is a Toronto-based Insurtech company that equips brokers and insurance companies with tools they need to excel in operations and client acquisition. Their rate comparison site MyChoice.ca, gives Canadians access to competitive auto, home, and life insurance rates. MyChoice blends their industry knowledge with cutting-edge technologies to build solutions that significantly enhance brokerage and insurance company processes and workflows.
SOURCE My Choice Financial, Inc.
Vitalii Starov, [email protected]