Issue link: http://clhia.uberflip.com/i/563156
7 At the end of 2014, Canadians owned $4.2 trillion of life insurance. This represents an increase of 3.3 per cent or $136 billion over the amount owned at the end of 2013 and is more than one and a half times the amount owned a decade ago. Since 2004, life insurance ownership has grown at an average annual rate of 4.8 per cent. At the end of 2014, the industry administered more than 13.8 million individual life insurance policies in Canada in addition to group life insurance contracts, covering over 37 million certificate holders. Through ownership of some form of life insurance – with individual policies, group plans or both – almost 22 million Canadians currently provide their dependents with financial protection in the event of their deaths. (Life insurance ownership by region in Canada is shown on page 8.) Ownership by type While the ownership of all types of life insurance continues to increase, growth in individual insurance in force has consistently exceeded that of group insurance since the early 1980s. In fact, the average annual growth rates over the last decade were 5.7 per cent for individual life insurance and 3.7 per cent for group life insurance. At the end of 2014, the split in total ownership was 59 per cent individual insurance, 41 per cent group insurance. Ten years ago, individual insurance accounted for 54 per cent of the total. Individual life insurance Although many variations and combinations have been developed, individual life insurance can be classified as one of two basic types of coverage: permanent or term. Of the total amount of individual life insurance coverage in force at the end of 2014, 41 per cent was permanent, cash value insurance and 59 per cent was term insurance, including the term portion of combination plans. The proportion was quite different in 2004 when term insurance accounted for 49 per cent of total life insurance coverage. Permanent insurance offers more than death protection. As a by-product of the level premium system, or other premium patterns that exceed the actual cost of protection in the early years, these policies build cash values that can help families meet financial emergencies, pay for specific savings or provide retirement income. The policyholder who Part Three Life Insurance Ownership Life Insurance Owned by Type of Insurance (millions) Year-end Individual Group Total 1960 $ 32,128 $ 14,739 $ 46,867 1970 62,845 55,977 118,822 1980 177,915 253,279 431,194 1990 559,893 597,502 1,157,395 2000 1,068,471 1,019,446 2,087,917 2005 1,516,287 1,266,184 2,782,471 2006 1,623,876 1,331,659 2,955,535 2007 1,733,133 1,414,887 3,148,020 2008 1,845,782 1,510,154 3,355,936 2009 1,944,269 1,547,722 3,491,991 2010 2,053,840 1,572,720 3,626,560 2011 2,157,720 1,633,015 3,790,735 2012 2,268,916 1,654,470 3,923,386 2013 2,370,425 1,689,450 4,059,875 2014 2,471,899 1,723,593 4,195,492 Sources: OSFI, CLHIA Life insurance coverage Figures since 2000 report on the business of life insurance companies and fraternal benefit societies. Earlier years include data for life insurance companies only