By CAFII, Kingsville Times
Half of Canadian mortgage holders could only maintain their lifestyle for less than six months without their primary income, according to groundbreaking research from Pollara, commissioned by The Canadian Association of Financial Institutions in Insurance (CAFII).
The comprehensive Credit Protection Insurance (CPI) Segmentation Study surveyed more than 3,000 Canadians and reveals widespread financial stress alongside troubling gaps in protection confidence, even among those who already have insurance coverage.
The research, the first in Canada to map behavioural segments among current and potential CPI customers, found that 44% of mortgage holders report the current economic situation is negatively impacting their personal finances, while 57% have concerns about job loss in the next 12 months.
Perhaps most concerning: 50% say they would have serious problems paying bills if their main earner were unable to work.
Despite widespread insurance ownership, Canadians lack confidence in their existing safety nets. The study found that 35% don’t know how long their life insurance policy would last if needed, while only 38% feel confident they could pay their mortgage if the main earner lost income.
Even among those who believe they have sufficient life insurance (73%), experts note this confidence appears emotional rather than informed.
“This study shows a troubling contradiction: Canadians know they’re vulnerable, yet many remain underinsured or uncertain about the protection they do have. 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,” said Keith Martin, Executive Director, CAFII.
“With average household debt levels so high, these blind spots leave families exposed at the worst possible time. The challenge for our industry is not just providing insurance, but making sure Canadians understand and trust the protection available to them.”
The research identified five distinct consumer segments, with two groups standing out as having the greatest need for protection and support:
- The Confident Planner (26% of mortgage/Home Equity Line of Credit holders): Despite strong financial positions, this segment values CPI for asset protection, with 45% likely to purchase or renew coverage.
- The Anxious Realist (25% of mortgage/Home Equity Line of Credit holders): Struggling with affordability but standing to benefit most from protection, with 27% likely to purchase or renew despite financial constraints.
Together, these two segments represent 46% of the mortgage holders and point to clear gaps in confidence and coverage that leave many families financially vulnerable.
The study reveals that even among current CPI holders, concerns persist: only 30% agree the product provides good value for money, and just 29% find it affordable or trust it more than other insurance types. Among non-holders, 41% cite expense-related reasons for not having CPI, while 40% indicate lack of perceived need.
Communication gaps also make it harder for consumers to make informed decisions. Only 39% of non-holders recall being informed about CPI options, while 24-32% of non-holders don’t know enough to rate basic product attributes.
Although some mortgage and Home Equity Line of Credit holders have CPI (29% and 22% respectively), important gaps remain especially in job loss protection. Only 66% of mortgage-related CPI includes job loss coverage, compared to 94% for life coverage. The gap is particularly pronounced among those over 40, with only 48-54% having job loss protection compared to 79-95% of those under 40.
Most Canadians learn about Credit Protection Insurance from banks and credit unions (67%), and more than half of purchases (53%) take place there. However, the research found that 48% of non-holders were advised against CPI by financial professionals, highlighting that consumers may be receiving mixed messages and need better support in making informed choices.
Canadians are most likely to explore protection options when their finances feel stretched. Nearly half (44%) of respondents said they would consider CPI if bills became hard to manage, while others pointed to economic uncertainty, rising cost of living and major life events as moments when insurance feels most relevant.
“This research provides the CPI industry with a roadmap for better meeting the needs of financially vulnerable Canadians,” continued Martin. “The opportunity exists to close protection gaps, improve communication, and demonstrate value, particularly during life transitions and economic stress when families need protection most.”
https://kingsvilletimes.ca/2025/11/national-study-finds-mortgage-holders-face-rising-financial-vulnerability/
