Life insurance is essential to protecting families if the unexpected were to happen, but a large number of Canadians are still without coverage. Those who do have a life insurance policy are either insufficiently covered through employer benefits or have been sold a permanent policy that is more complicated and expensive than they need.
On the other hand, 39% of Canadians are now buying term life insurance and 51% report that they would purchase life insurance online, prioritizing affordability and convenience.
The ins-and-outs of the life insurance industry can be overwhelming, so we’ve put together the latest life insurance statistics to help answer some of your burning questions.
Overview of Canadian life insurance statistics
22 million Canadians have life insurance coverage in place, totalling $5.1 trillion (Source: Canadian Life & Health Insurance Association)
44% of Canadians don’t have life insurance
62% of Canadians with life insurance have it through their employer
77% of Canadian parents with dependant children have a life insurance policy
80% of Canadians believe Canadian life insurance rates are too expensive (Source: Reviewlution)
51% of Canadians report that they would purchase life insurance through an online platform if they were buying it today
~88% of universal life insurance policies never pay a claim due to policyholders allowing their policies to lapse
Canadians’ top three reasons for purchasing life insurance include: ◦ 40% of Canadians said covering final expenses was their top reason for purchasing life insurance ◦ 32% of Canadians said that they bought life insurance because it’s a good/wise/necessary thing to do ◦ 30% of Canadians bought life insurance as a way to transfer wealth to their beneficiaries
72% of Canadian households prefer to purchase life insurance through an agent. Other preferences include: ◦ 14% of Canadians prefer to buy life insurance online ◦ 8% of Canadians prefer to buy life insurance through their work ◦ 6% of Canadians prefer to buy life insurance directly by phone or mail
30% of Canadians feel they should have more life insurance coverage in place
20% of Canadian households would face immediate financial adversity if a primary wage earner suddenly passed away
Canadians’ knowledge about life insurance varies: ◦ 16% consider themselves very knowledgeable about life insurance ◦ 57% consider themselves somewhat knowledgeable ◦ 23% do not consider themselves very knowledgeable or knowledgeable at all
(Source: Life Insurance Marketing and Research Association)
Canadian life insurance coverage statistics
While many Canadians are protected with life insurance, many still do not have this safety net in place, largely due to the belief that life insurance costs too much. While this isn’t necessarily true, as term life insurance is an affordable option suited to most people, it is true that Canadians are typically paying more for life insurance than they need to.
22 million Canadians have life insurance coverage in place, totalling $5.1 trillion (Source: Canadian Life & Health Insurance Association)
64% of Canadians value life insurance the most when choosing between life, health, home, and auto insurance (Source: Reviewlution)
Canadians are overpaying by an average of 36% for their life insurance policy
$423,000 is the life insurance protection of the average Canadian household (Source: Reviewlution)
Percentage of people with life insurance in Canada
56% of Canadians have life insurance
44% of Canadians don’t have life insurance
80% of Canadians believe Canadian life insurance rates are too expensive (Source: Reviewlution)
~8% of respondents believe the process of getting life insurance takes too long (Source: Reviewlution)
A 50% growth in the number of Canadians purchasing or considering life insurance has occurred since the beginning of the COVID-19 pandemic
67% of those purchasing or consider life insurance since the beginning of the pandemic cite COVID-related concerns as motivating factors
35% of those who did not purchase life insurance cited a perceived lack of affordability as the reason
6% of Canadians bought life insurance in 2021
40% of those without life insurance report it’s because they can’t afford it
Life insurance growth rate facts and statistics
The life insurance industry contributes more than $860 in economic growth for Canada (Source: Reviewlution)
Canadian life insurance claims statistics
$14.3 billion paid in life insurance benefits, $8.4 billion of which was paid as death benefits and $5.9 billion of which was paid to living policyholders as disability benefits, cash surrenders or dividends (Source: Canadian Life & Health Insurance Association)
How Canadians are buying life insurance
How Canadians are buying life insurance is changing, with more people embracing online life insurance solutions over in-person sales.
~80% of Canadians purchase their life insurance through in-person sales (Source: Reviewlution)
49% of Canadians that purchased life insurance through an advisor purchased a permanent policy
2% of Canadians who have or have had a life insurance policy purchased their previous policy online
51% of respondents report that they would purchase life insurance through an online platform if they were buying it today
65% of Canadians 18-34 years of age and 39% of Canadians aged 55+ expressed willingness to purchase their life insurance online in the future
What kind of life insurance are Canadians buying?
While many Canadians are satisfied with their life insurance purchase, they are often selecting a type of insurance that doesn’t fit their unique needs. Term life insurance is typically the best option for most people and is on the rise, while most other types of life insurance result in Canadians overpaying and not having sufficient coverage.
64% of of total policies in-force are individual life insurance policies, up from 56% in 2010, driven primarily by term life insurance (Source: Canadian Life & Health Insurance Association)
40% of those aged 18-34, 41% of those aged 35-54, and 62% of those aged 55+ purchased life insurance through an advisor
86% of those with a permanent life insurance policy are sure they’ve made the right decision
~88% of universal life insurance policies never pay a claim due to policyholders allowing their policies to lapse, most commonly due to financial setbacks
5-10x more commission is typically received by insurance brokers by selling permanent or "whole" life insurance policies instead of term policies
Canadians saw a 46% average reduction in their premiums when they replaced their mortgage life insurance policy with a term life insurance policy, with monthly payments falling from $67 to $36
Canadian group life insurance statistics
62% of Canadians with life insurance have it through their employer
53% of Canadians who have life insurance solely through their employer are between the ages of 30 to 50, a group most likely to have dependents and large liabilities
Parents and life insurance statistics
Thankfully, most parents have life insurance coverage in place. That said, they typically don’t have the right coverage to protect their family, often opting for coverage solely through their employer or through other insufficient means, such as mortgage life insurance.
77% of Canadian parents with dependent children have a life insurance policy
49% of parents who don’t have life insurance report that it is because it is too expensive
33% of parents with children under the age of 18 have term life insurance, compared to 70% of parents with life insurance as a benefit through their employer
44% of those parents who have life insurance through work rely solely on this coverage, with no additional coverage in place
25% of Canadian parents with dependent children have mortgage life insurance
22% of parents with children under the age of 18 have purchased permanent life insurance
23% of parents purchased their children their own life insurance policy
More Canadians are choosing term life insurance
While more Canadians are opting for term life insurance, many have chosen life insurance policies that may not suit their family’s needs–if they have coverage at all.
For those who don’t have coverage, many have cited a lack of affordability as the reason. But life insurance doesn’t have to be expensive. Term life insurance is an affordable option suited to most Canadian families.
Remember—it’s important to have a safety net in place in case the unthinkable were to happen. No matter what kind of coverage you decide on, some protection is better than none at all.
