Canadians believe they need an average of $265,607 CAD ($236,068 USD) in life insurance coverage paid out upon their death to ensure that funeral expenses and debt are covered and that their dependents are supported financially, according to a new study from BMO Insurance.

The report indicates that the amount of life insurance coverage respondents believe they need depends on their personal situation. According to the study:

  • Those who are married with children say they need an average of $320,974.
  • Those who are married without children say they need an average of $290,962.
  • Single individuals (without children) say they need an average of $186,629.
  • Those who are single with children said they need an average of $106,517.

“The dollar amount of insurance that people need depends entirely on their personal situations — if they’re married, if they have kids, if they’re single, if they have coverage through work and so on,” say Rocco Casullo, Head, Direct to Consumer Insurance, BMO Insurance. “However, while many people tend to focus on making sure that their family is supported financially if they were to die, it’s also important to take into account that illnesses and accidents can happen as well.

“These types of unexpected events can put a tremendous amount of financial stress on both the affected individuals and their families,” Casullo adds.

According to the study, 65 percent of Canadians believe that developing a critical illness or becoming disabled as a result of an accident would have a significant financial impact on their or their family’s standard of living. Further, more than half (55 percent) believe it would take fewer than six months for them to start feeling financially strained if they became seriously ill or were disabled; more than a third (38 percent) would feel financially strained in fewer than three months.

The study also finds that only 16 percent of Canadians have purchased all of life, critical illness and disability insurance. When asked why they have not bought all three types of insurance, the top reasons Canadians identified were:

  • It is too expensive (38 percent).
  • I am in good health (27 percent).
  • I feel that I already have enough coverage through work (26 percent).

Regional Breakdown

Region

Average amount ($) of life insurance Canadians think they need

 

% of Canadians who believe that a critical illness or being injured/disabled would have a significant financial impact on their family

 

% of Canadians who have life, critical and disability insurance

 

% of Canadians who have not purchased all three types (life, critical and disability insurance) because it is too expensive

National

265,607

 

65

 

16

 

38

Atlantic

184,579

 

69

 

15

 

29

Quebec

93,188

 

61

 

19

 

36

Ontario

418,879

 

68

 

15

 

38

Prairies

136,840

 

61

 

17

 

38

Alberta

174,456

 

62

 

20

 

37

B.C.

298,177

 

63

 

13

 

43