8
Life insurance
Canadians buy life insurance for many reasons, but mainly to
provide financial protection for their families in the event they
die prematurely. Proceeds from a life insurance policy are used
to replace income, pay debts, or create or add to an estate.
How life insurance is purchased
Canadians mainly buy life insurance on an "Individual" basis
through an agent or advisor. Simpler products sold by direct
mail or on-line marketing, while increasing, still only account for
1% of individual premiums.
Life insurance is also acquired on a "Group" basis through an
employer or as members of an association, and is priced on the
risk characteristics of the group as a whole, rather than of the
individual consumer.
Life insurance protection by insured household and
income level
Consumers choose the amount of life insurance they hold based
on a number of factors: marital status, desired level of income to
support dependents, outstanding mortgages, etc. As a result,
life insurance protection closely reflects age and income levels.
Individual 79%
Group 21%
2016 life insurance
premiums
$20.3B
Canadians
own
life insurance
coverage
22M
$4.5T
- -
$100K
$200K
$300K
$400K
$500K
$600K
Average protection per insured household
Median age
Median household income
60
55
50
45
40
35
NL PE NS NB QC ON MB SK AB BC CA
$404,000
Average protection per
insured household, up from
$388,000 in 2015,
approximating five times
household income
