CLHIA-ACCAP

Canadian Life and Health Insurance Facts, 2014 Edition

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universal life (55 per cent) than whole life (45 per cent) insurance products. Term insurance policies typically offer benefits on death only and do not build up cash values. The premiums are initially lower than permanent insurance policies for the same amount of coverage, but increase with each renewal of the term policy, reflecting higher mortality rates at older ages. Coverage usually terminates at a specific age (e.g., 65, 70 or 75). Mass-marketed insurance is sold on an individual basis to members of a group, usually as term life insurance policies with automatic renewal provisions. In contrast, group life insurance is issued in the form of a master policy, under which certificates are issued to the individuals covered. Of the total individual life insurance owned by Canadians, 18 per cent is participating where policyholders share in the surplus earnings on these policies distributed by the company as policyholder dividends. The remaining 82 per cent is non-participating. Ten years ago, participating policies accounted for 26 per cent of the total individual life insurance owned. Group life insurance At the end of 2013, 62 per cent of the group life insurance in force was on groups of employees, 6 per cent was on members of unions and associations, and 32 per cent was on group creditor's insurance for individuals who had borrowed from credit agencies (e.g., banks, mortgage brokers, etc.). The average coverage per certificate was $46,500. Average amounts owned Excluding people without life insurance, the average amount of coverage per insured individual was about $189,600 at the end of 2013. Ten years ago, the average coverage was $142,200. Similarly, many Canadian households are protected by some form of life insurance – on an individual basis, under group plans or both. At the end of 2013, the average amount owned by insured households was about $373,400, almost one and a half times the level ($254,500) from a decade ago. 7 Life Insurance Ownership by Region End of 2013 ($billions) Sources: OSFI, CLHIA Life insurance coverage 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 Atlantic provinces Quebec Ontario Prairie provinces British Columbia 184.8 314.7 336.3 520.9 388.4 649.3 117.4 121.4 948.0 453.4 Individual Group

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