By Liezel Once, CMP
Half of mortgage holders could not maintain their lifestyle for six months without their main income
A new national study has revealed that Canadian mortgage holders are facing growing financial vulnerability, with many lacking confidence in their insurance coverage despite widespread ownership.
The Pollara Credit Protection Insurance (CPI) Segmentation Study, commissioned by the Canadian Association of Financial Institutions in Insurance (CAFII), surveyed more than 3,000 Canadians in July and found that half of mortgage holders could only maintain their lifestyle for less than six months if their primary income disappeared.
The research, the first in Canada to map behavioural segments among current and potential CPI customers, painted a stark picture of household resilience.
Forty-four percent of mortgage holders reported that the current economic climate had negatively affected their personal finances, while 57% expressed concerns about job loss in the coming year.
“This study shows a troubling contradiction: Canadians know they’re vulnerable, yet many remain underinsured or uncertain about the protection they do have,” Keith Martin, executive director of CAFII, said.
“Only 38% feel confident they could cover their mortgage if the main earner lost income, and more than a third don’t even know how long their life insurance would last.”
Confidence crisis and coverage confusion
Despite 73% of respondents believing they have sufficient life insurance, only 38% felt confident they could pay their mortgage if the main earner lost income.
The study flagged that 35% of Canadians did not know how long their life insurance would last if needed—a gap that experts described as “emotional rather than informed” confidence.
Opportunity segments and persistent barriers
The study identified five consumer segments, with two groups—Confident Planners and Anxious Realists—standing out for their need for better protection.
While 45% of Confident Planners were likely to purchase or renew coverage, only 27% of Anxious Realists, who struggle with affordability, said the same.
Affordability and trust remain major barriers: just 30% of current CPI holders agreed the product provided good value, and only 29% found it affordable or trusted it more than other insurance types.
Among non-holders, 41% cited cost as a reason for not having CPI, and 40% pointed to a lack of perceived need.
Job loss protection and industry response
Coverage gaps were especially pronounced in job loss protection. Only 66% of mortgage-related CPI included job loss coverage, compared to 94% for life coverage.
The gap widened among those over 40, with only 48–54% having job loss protection, compared to 79–95% of those under 40.
Most Canadians learned about CPI from banks and credit unions, but the study found that nearly half of non-holders were advised against CPI by financial professionals, highlighting the need for clearer communication.
Martin said, “The opportunity exists to close protection gaps, improve communication, and demonstrate value, particularly during life transitions and economic stress when families need protection most.”
