The Short Answer
Many Canadian families are unintentionally underinsured. A practical estimate is income replacement + debt payoff + future milestones, minus current savings and existing coverage.
Table of Contents
Rising living costs, mortgage balances, and delayed planning decisions have widened the coverage gap for many households. The risk is simple: if income stops suddenly, families are forced to make hard financial trade-offs.
Why the Underinsurance Gap Exists
Most families underestimate how long support is needed. Group plans are often too small, inflation is ignored, and key future costs like education are excluded from the estimate.
Pro Tip
Test your plan against 10-15 years of family expenses, not just a one-time debt payoff number.
How to Calculate Your Coverage Gap
- Step 1: Add total debts and immediate obligations.
- Step 2: Estimate annual family expenses and multiply by support years needed.
- Step 3: Add major future costs (education, childcare, eldercare).
- Step 4: Subtract savings, investments, and existing insurance.
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How to Fix It Affordably
For many families, layering larger term life coverage with optional permanent protection is the most efficient way to close the gap while keeping premiums manageable.
