New National Study Reveals Canadian Mortgage Holders Face Growing Financial Vulnerability Despite Insurance Coverage
Pollara study commissioned by CAFII identifies critical gaps in protection awareness and confidence, pointing to opportunities for industry to better serve financially vulnerable families.
TORONTO, Nov. 18, 2025 /CNW/ – 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), released today. 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.
New National Study Reveals Canadian Mortgage Holders Face Growing Financial Vulnerability Despite Insurance Coverage (CNW Group/CAFII)
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.
The Confidence Crisis
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.”
Two Key Opportunity Segments Identified
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/HELOC 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/HELOC 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.
Affordability and Trust Remain Barriers
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.
Coverage Gaps in Job Loss Protection
Although some mortgage and HELOC 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.
Financial Institutions Hold the Key
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.
Focus on decision-making
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.”
About the Study
The Pollara CPI Segmentation Study was conducted in July 2025 with a representative sample of more than 3,000 Canadian mortgage and HELOC holders. The research identified five distinct consumer segments and analyzed their financial vulnerability, protection needs, purchase behaviors, and attitudes toward Credit Protection Insurance.
About CAFII
The Canadian Association of Financial Institutions in Insurance is a not-for-profit industry association dedicated to the development of an open and flexible insurance marketplace. CAFII believes that consumers are best served when they have meaningful choice in the purchase of insurance products and services. CAFII’s 14 members include the insurance arms of Canada’s major financial institutions–BMO Insurance, CIBC Insurance, Desjardins Insurance, National Bank Insurance, RBC Insurance, Scotia Insurance, and TD Insurance, along with major industry players Assurant Canada, The Canada Life Assurance Company, Canadian Tire Bank, Chubb Life Insurance Company of Canada, CUMIS Services Incorporated, Manulife (The Manufacturers Life Insurance Company), and Securian Canada.
