New report also reveals how lifestyle and financial choices are impacting protection planning
Canadians navigating rising living costs and economic uncertainty are gravitating toward familiar ground when it comes to life insurance and increasingly making long-term protection decisions earlier in life.
New findings from PolicyMe’s Canadian Term Life Insurance: A Market Snapshot reveal a strong national consensus around coverage amounts, shifting beneficiary priorities between genders, and evolving health and lifestyle patterns that could influence underwriting and risk assessment in the years ahead.
Based on more than 18,000 customer interactions recorded between October and December 2025, the report, released today (Feb. 25) offers a snapshot of how financial realities, demographics, and wellness trends are reshaping the term life insurance market heading into 2026.
Canadians converge on a familiar coverage number
Across regions, income levels, and age groups, one figure stands out: $500,000.
The report shows this amount has effectively become the default choice among applicants, striking what many consumers appear to view as a workable balance between affordability and meaningful financial protection.
Younger buyers, particularly those aged 18 to 44, frequently combine that coverage level with 30-year terms, a strategy that suggests an effort to secure stability during mortgage-heavy and family-building years.
Canadians aged 45 to 59 tend to opt for smaller policies, most often choosing $250,000 with shorter 10- to 15-year terms. Among those aged 60 and older, $100,000 policies paired with similar shorter durations dominate.
The trend highlights how protection needs evolve alongside financial obligations. Larger policies and longer terms appear during peak earning years, while coverage typically contracts as debts decline and dependents become financially independent.
Gender divide emerges in beneficiary decisions
While spouses and partners remain the primary beneficiaries nationwide, the report reveals clear differences in how men and women approach financial protection planning.
Nearly three-quarters of applicants who named a beneficiary selected a spouse or partner. Children accounted for 19.9%, while parents represented just 2.8%.
Men overwhelmingly prioritized partners, naming them beneficiaries 83% of the time. Women, however, showed a stronger tendency to extend coverage toward children, doing so nearly three times as often as men (28.8% compared with 10.7%).
The findings suggest family dynamics and caregiving roles continue to influence insurance decisions differently across genders, reinforcing the personal nature of coverage planning.
Mental health reshaping applicant profiles
Health disclosures also reveal significant generational contrasts.
More than half of applicants reported at least one medical condition when providing health information. Among younger Canadians, mental health concerns stand out as the most common. Of applicants aged 18 to 29 who disclosed a condition, 37.1% reported mental health-related issues. That compares with just 3.8% among applicants over 60.
Allergies and immune-related disorders also appeared far more frequently among younger customers, affecting nearly three in 10 younger applicants with reported conditions, versus about one in 10 older applicants.
The data suggests insurers may increasingly need to adapt underwriting models as wellness trends and transparency around mental health continue to evolve.
Gen Z moderation meets new underwriting challenges
Lifestyle habits are shifting as well, although not always in ways that simplify risk assessment.
Daily alcohol consumption is lowest among Canadians aged 18 to 29, with only 1.0% reporting drinking every day. Rates steadily increase with age, reaching 4.4% among applicants aged 60 and older. Young women report the lowest daily alcohol use overall at just 0.4%.
However, nicotine use tells a different story. Gen Z applicants reported the highest usage levels, with 7.3% indicating nicotine consumption within the past year, compared with between 5.5% and 6.0% among older groups.
The gap between declining alcohol use and rising nicotine consumption presents a growing underwriting consideration, particularly because nicotine products are often assessed similarly to smoking in policy pricing and eligibility decisions.
Ultimately the report underscores how life insurance purchasing decisions remain closely tied to broader life circumstances from mortgages and childcare costs to health realities and evolving lifestyle habits.
As economic pressures persist, Canadians appear increasingly focused on securing protection that balances cost certainty with long-term financial security — a shift that may continue shaping the industry well beyond 2026.
