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.