By Keith Martin, Executive Director, Canadian Association of Financial Institutions in Insurance (CAFII)
Many Canadians believe they have enough protection in place to weather a financial shock. But new national research suggests that confidence may not always match reality.
As part of a new study commissioned by CAFII, Pollara Strategic Insights surveyed more than 3,000 mortgage and HELOC holders to understand how Canadians think about protection and how prepared they actually are. Across every age group, income level, and life stage, one theme emerged: many people feel confident, but most do not know how long their insurance coverage will last.
The Confidence Gap at a Glance
Several findings point to a disconnect between how protected Canadians feel and how protected they are:
- Only 38% of mortgage holders feel confident they could keep paying their mortgage if the main income earner lost their job.
- Half could not maintain their lifestyle for six months without income.
- Many homeowners are unclear about the duration and scope of their creditor protection insurance and whether it keeps pace with their financial responsibilities as borrowing changes.
Even among people who consider themselves financially secure, the study shows that unexpected income loss could cause significant strain.
Why Confidence and Preparedness Don’t Always Match
The research highlights three key reasons many Canadians may feel more protected than they actually are.
- Emotional confidence often replaces informed understanding – Many people assume their coverage is “enough” without knowing:
- What type of policy they hold
- How long the benefits last
- How coverage interacts with debt, bills, or income replacement
This is particularly true for life insurance. Most homeowners believe they have adequate coverage, yet many don’t know how long that coverage would support their household.
- Rising costs create new stress points – Even higher-income households face financial pressure:
- 59% of those earning $120k–$250k worry about ongoing expenses
- Nearly half would struggle to pay bills after an income loss
A bigger pay cheque doesn’t automatically translate into stronger financial protection.
- Many rely on assumptions, not conversations. While half of Canadians say they use a financial advisor, only 20% regularly discuss insurance needs. This means gaps often go unnoticed until a crisis forces them to the surface.
Why This Matters
Understanding the confidence gap doesn’t mean that homeowners need more insurance. Instead, it highlights something more important:
Every Canadian deserves a clear picture of what protection they already have — and what risks might remain.
Real confidence comes from:
- Knowing what your insurance covers
- Understanding how long creditor insurance benefits would apply to covered loan or credit payments
- Making informed choices about creditor insurance using current information about credit obligations and coverage, rather than assumptions
A Clearer Path Forward
A few simple questions can help homeowners strengthen their financial resilience:
- What insurance protection do I currently have, if any?
- How long would my creditor insurance help cover loan or credit payments if my income changed suddenly?
- Can the current insurance coverage I have in place cover the financial responsibilities I have today?
At CAFII, we believe that clarity is the foundation of confidence. Clear information about creditor insurance, including how it supports borrowers as credit obligations increase, helps Canadians better understand the role these products play in managing financial risk.
