In the recently published 2017 edition of Canadian Life and Health Insurance Facts
, the CLHIA detailed how benefits paid to Canadians in 2016 amounted to $88 billion. This represented a 4.6% increase on 2015, with 90% of those benefits going to living policy holders.
The figure didn’t surprise Lorne Marr
, founder of Markham-based MGA LSM Insurance. Living benefits make up a large part of his business, and in his view, there are a number of reasons why these products are growing in popularity.
“I’m not too surprised that benefits are going up, especially with the amount of debt people are carrying now,” he says. “The more debt you have the more debt you have to protect, but even the stress from that debt ups the likelihood of developing a critical illness or even passing away prematurely.”
When Marr first entered the insurance business in 1993, critical illness insurance was a relatively niche product. That isn’t the case today, and while traditional life and health insurance coverage are still the dominant plans in the industry, CI is becoming much more prevalent.
“If you look at 25–30 years ago, if someone had a heart attack there was a good chance they would die,” says Marr. “Now it’s more likely they will live, but then it becomes a case of how they live. If you can’t live the same way and have to make some changes, having that money there is a great way to be able to make those changes.”
In the CLHIA fact book, it was revealed that 12 million people had disability insurance in Canada, with 20 million having coverage for accidental death, long-term care or critical illness. Disability insurance allows the policyholder to make a claim if they suffer an accident that leaves them unable to work. Traditionally, this would come through an employer sponsored plan, but this is changing as the work environment shifts towards more temporary arrangements.
“For disability insurance, 20 years ago everyone had that through their employer,” says Marr. “Now so many people are on contract work, so they have to set up their own plan and have their own strategy.”
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Workers in Canada are operating in a much different environment than their parents and grandparents. Job security is precarious in many situations, and the idea of staying with one firm for your entire career would seem preposterous to those entering the workforce in 2017. It means workplace benefits have also had to evolve, and insurance providers now offer a full range of products to suit the contrasting needs of employers and employees.