9
$1T
$2T
$3T
$4T
2005 2007 2009 2011 2013 2015
Individual universal life Individual whole life
Individual term Group term
Individual life insurance
has grown faster than
group in the past
decade, accounting for
60% of the total, up from
54% in 2005. This is
mostly driven by growth
in individual term life
insurance
-
46%
45%
45%
43%
42%
27%
29%
30%
32%
34%
14%
13%
12%
11%
11%
13%
13%
13%
14%
13%
40%
36%
10%
14%
Life insurance protection by product
At the end of 2015, Canadians owned $4.3 trillion of life insurance protection. There are two basic
types of life insurance: permanent and term insurance, with variations on each to meet specific
consumer needs.
Term insurance provides cost-effective temporary coverage over an insured's prime earning
years. Premiums typically increase over time, in 5, 10 or 20 year "steps". Term insurance
usually provides a right to convert to permanent insurance with the same insurer, without
further underwriting, providing consumers with more flexibility.
Permanent insurance meets life-long protection needs. In addition to death protection, cash
values are accumulated and can be used for financial emergencies, or to supplement
retirement income. Premiums can be paid over a set number of years or for life.
Whole life insurance is the traditional form of permanent insurance, where the insurer
takes
on both the risk related to death and the underlying investment risk. Under Universal life
insurance, consumers manage the investment risk and the insurer assumes the risk related
to death.
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