According to a recent survey conducted for BMO Insurance, Canadians say they only need an average of $265,607 in life insurance to cover funeral expenses, pay off debts, and provide for their dependents.
People who were married or in a common-law relationship with children said they require an average of $320,974 of insurance, while those who were married or common law without children said they need an average of $290,962. Singles without children believe they require an average coverage amount of $186,629, while single parents say they only need an average of $106,517.
In addition, 65% of those surveyed think that developing a critical illness or becoming disabled as a result of an accident would have a significant financial impact on their or their family’s standard of living, and 55% indicated that it would take less than six months for them to start feeling financially strained. More than a third of respondents said they would feel financially strained in less than three months.
Despite these concerns, the study revealed that just 16% of respondents had purchased all three of life, critical illness and disability insurance. When asked why they have not bought all three types of insurance, the top reasons Canadians gave were that it would be too expensive (38%), that they were in good health (27%), and that they felt they had sufficient coverage through work (26%).