Most Canadian term life applicants cluster around $500,000 in coverage despite differing incomes
Younger Canadian clients may be drinking less, but they are taking on more nicotine and cannabis – and that mix is starting to matter for life insurance risk and pricing.
Analysis of more than 18,000 term life customer interactions in Q4 2025 shows buyers converging around similar coverage amounts despite different ages and incomes.
For many, $500,000 emerges as the “sweet spot” that balances affordability with meaningful protection for loved ones, even as “day-to-day costs like rent, groceries, and childcare keep climbing.”
Younger buyers, in particular, are locking in coverage early and prioritising long-term protection, even when budgets are tight.
The data also points to clear life-stage patterns.
Larger policies and longer terms appear most often when clients carry mortgages, have young children, and are in their peak earning years.
As debts shrink and obligations ease, coverage needs tend to decline.
Health disclosures are shifting as well.
Younger Canadians appear more open about their health and face distinct challenges compared with older cohorts.
A chart on the “Prevalence of the 5 Most Commonly Reported Medical Conditions” maps allergy or immune system conditions, breathing and respiratory issues, diabetes (Type I or II), hypertension, and mental health, psychological, emotional, eating, or developmental conditions across age bands from 18–29 to 60+.
The growing weight of mental health in these profiles signals that life insurers will need to keep adapting coverage models to reflect modern wellness patterns.
Substance use trends add another layer for underwriting.
The report says younger Canadians show lower alcohol consumption but higher nicotine and cannabis use.
A chart on the “Percent of Applicants Reporting Substance Use in the Past 12 Months” tracks one or more alcoholic drinks per day, nicotine, and cannabis and cannabinoid oil across the same age bands, underlining how patterns shift with age.
Many young customers may not realise that life insurance underwriters often treat any nicotine consumption in a similar way to smoking.
That approach can significantly affect eligibility and premiums, even as new nicotine products enter the market.
While product formats evolve, underwriting frameworks have largely stayed the same, making this an area to watch as usage habits continue to change.
The Q4 2025 snapshot of the Canadian term life market links coverage decisions directly to competing financial obligations, changing health realities, and emerging risk profiles across generations and genders.
As clients’ lives and habits evolve, their coverage choices – and the way insurers assess them – are evolving in tandem.
