A new study looks at the ownership trends among households in Canada, as well as reasons for and against ownership
In recognition of Life Insurance Awareness Month, LIMRA has released new figures reflecting the state of life insurance ownership among Canadian households.
Drawing from its 2019 Canadian Life Insurance Ownership Series — Household Trends Study, the group reported that Canadian households have an overall life insurance ownership rate of 68%, unchanged from previous statistics reported by LIMRA in 2013. Less than half of all Canadian households (44%) have individual coverage, while nearly half (49%) have group coverage.
According to LIMRA, the top three reasons given by Canadian consumers for owning life insurance are to cover final expenses (40%); because it’s a good/wise/necessary thing to do (32%); and to facilitate a transfer of wealth (30%).
When asked how they buy life insurance, around three quarters (72%) said they prefer to get it through an agent. Other channels cited included online (14%), through work (8%), and directly by phone (5%) or mail (1%).
Just over a third of Canadian households (35%) said they have a personal life insurance agent, while 23% said they had an agent at some point in the past. More than four tenths of Canadians (42%) said they have never had a personal life agent.
Gauging the need for coverage among Canadian households, over half (61%) indicated that they personally need life insurance coverage. Three in 10 said they should have more coverage, while 32% said they are at least fairly likely to buy life insurance in the next year. Another one in five households said they would face immediate financial adversity if a primary wage earner were to die suddenly.
When it comes to awareness or familiarity with life insurance, LIMRA found that just 16% of Canadians considered themselves very knowledgeable. More than half (57%) said they were somewhat knowledgeable, while 23% said they were not very knowledgeable or not knowledgeable at all.
As for the reasons why Canadians do not own life insurance, 27% said they could not afford it, while 25% said they had other financial priorities. Another 24% said they do not need any life insurance, while 21% cited a preference for other financial products.