New research conducted by LIMRA on behalf of the Canadian Association of Financial Institutions in Insurance (CAFII) reveals a critical gap in creditor life insurance coverage among Canadian homeowners. The study, aimed at assessing insurance products among homeowners, particularly Credit Protection Insurance (CPI), has uncovered concerning trends about the financial vulnerability of many Canadian families.
The report uncovered that a significant 80% of Canadian homeowners lack adequate insurance coverage, leaving them either uninsured or underinsured with CPI or traditional life insurance. This deficiency in coverage puts many families at risk of financial hardship during unexpected life events. Moreover, low-income homeowners are disproportionately more likely to be uninsured or underinsured, further exacerbating financial insecurity.
Despite the alarming rates of underinsurance, only 55% of all homeowners with credit own CPI. This discrepancy is even more pronounced among low-income homeowners, highlighting a significant knowledge gap and the need for increased awareness and education about CPI. Furthermore, a considerable portion of Canadian homeowners, 38%, fall into the category of at risk, underscoring the urgency for action to improve financial security.
CAFII Executive Director, Keith Martin, emphasized the report’s significance, stressing the need for Canadians to assess their insurance needs and coverage. The study calls for educational initiatives, prioritized access to CPI, and considering survivorship as essential steps to addressing the prevalent underinsurance issue among Canadian homeowners.
The findings of this study underscore the critical need for immediate action to enhance the financial security of Canadian homeowners and ensure access to adequate protection in times of adversity. For further details and to access the complete report, please visit CAFII’s website.
