How three trends are set to impact the Canadian life insurance space

by Leo Almazora18 May 2018

Canadians can expect significant changes in the way they receive and benefit from life insurance — mostly for the better — thanks to recent technological and legal trends.

The use of software to gather and analyse information from health-tracking gadgets and apps could open the door for people to get cheaper and more personalized insurance, according to a piece published by the Cape Breton Post.

Citing a report from Capgemini, the article said some life insurers are already “offering policies that reward policyholders who record and share their physical activity using wearable devices.” As more companies join the trend, the potential for firms to use granular insights to determine each customer’s risk exposure — and create more customized products — will increase.

“Your experience with life insurance will become more convenient and the products will become more personalized,” said Nate Root, vice president of data and analytics for the insurance industry at Capgemini.

“You’re going to be able to buy short-term life insurance when you go on trips,” he added. Should that prediction come true, the article said, Canadians who take vacations abroad may be able to buy life policies that offer a larger death benefit than what’s currently available with travel insurance. 

Aside from advancements in technology, legal developments are expected to alter the type of benefits Canadians can expect. That includes medically assisted suicide, a contentious procedure that became federally legal in in 2016.

Citing Canadian Life and Health Insurance Association (CLHIA) vice-president of External Relations Wendy Hope, the article said insurance companies are not expected to treat medically assisted deaths as suicides since they are now legal.

“It’s going to be considered not as a suicide but as a medical procedure, so you will get the money from your life insurance company,” confirmed Lawyer Michèle Pelletier, New Brunswick’s consumer advocate for insurance.

There’s also the upcoming legalization of recreational marijuana. According to Hope, the presence of cannabis in a policyholder’s system upon death should not impact the death benefit paid out by insurance companies.

“If an individual already holds an insurance policy, the fact that they died with cannabis in their system would have no bearing on the death benefit being paid as set out in the policy,” she said.

But the consumption of recreational cannabis products could affect the life insurance premiums that Canadians pay. Whether they will increase or decrease depends on how the substance would affect people’s health.

“The issue that applies is what the health impact will be of smoking marijuana,” said CLHIA vice president of underwriting and policy Brent Mizzen in an interview. Mizzen added that he would need to check on the evidence before being able to comment.


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