Insurance Advice: People in Canada don’t have enough life insurance!

If you live in Canada you know about the booming economy but you might not know where to get good quality life insurance advice.  Even with the recent economic down-turn the unemployment rate remained lower than the Canadian national average and incomes remained at the top of all Canadian cities. The future also looks very bright for Western Canada. The Conference Board of Canada predicts that by 2011 Alberta will once again be the economic engine of Canada, and Calgary will be its business mecca.

So, with all this prosperity and a bright future, you would think the average person in Canada is doing good financial planning and getting life insurance advice. Obviously they can afford it with the highest average incomes in the entire country. Well, when it comes to life insurance planning Canada and all of Alberta is drastically under-insured.

People in Canada are lacking good Life Insurance Advice

Lowest life insurance coverage in Canada

The LIMRA (a Canadian and American insurance industry research association) reports on statistics of life and health insurance ownership. There 2009 report showed Alberta, for example, as having one of the lowest ownership levels of personal life insurance in all of Canada. Only 50% of Albertans own a life insurance policy. This is compared to a national average of 55% (and this does not represent adequate protection for Canadians), and provinces like Ontario at 59% and Quebec at 63%. The average sized life insurance policy in Alberta is $325,000. To bring Canadian life insurance ownership up from 55% to 65%, insurance brokers and agents would have to sell over $900 Billion of life insurance coverage!!

You might be thinking that all the uninsured people don’t really need personal life insurance since they have coverage through a group benefits plan at work. If you were to combine personal life insurance ownership with those that have some life insurance through work, you only get to 78% of Canadians with any life insurance coverage. That means almost one in four people in Canada are walking around with no life insurance at all. And many of these people have families who rely on them and debts to be paid off. These people and families need to get some qualified life insurance advice.

Why the lack of coverage – are people in Canada cheap?

People in Canada are NOT cheap. They are not more willing to take risks and roll the dice with their family’s future than anywhere else in the world. From personal experience, when sitting down with clients in Calgary, Toronto and Saskatoon (all place I have worked) I find them to be very willing to take good insurance advice and spend money on personal risk protection plans that make sense to them. The fault lies with the Life Insurance Industry in Canada.

There are a number of factors contributing to the general lack of life insurance sales in Canada.

• The average age of insurance advisors in the Canada is now 57 years old. Many of these agents have built a good book of business and are living off their existing client base. There is no motivation to continue to build new clients and prospect for a new sale. They are on auto-pilot, heading into retirement years.
• Not enough new advisors are entering the business, and there is a general lack of support when they start, leading to an 85% failure rate of new agents entering the life insurance industry.
• Many successful agents and brokerages are focused on the high net-worth clients in Canada, spending time and money to woo these clients and they have become disinterested in the average, middle income Canadians.
• Banks in Canada have started to sell insurance through call centres of insurance kiosks, offering creditor/mortgage insurance or cheap term life insurance, and generally offer no advanced insurance advice. People dealing with banks for life insurance coverage are generally also under-insured for their needs.

It comes down to a lack of advisors across the country available to give good quality life insurance advice. There just aren’t enough insurance advisors in Canada having enough quality conversations with average people, delivering the life insurance advice people need. It will become even harder to find qualified help as the group of aging insurance agents begin to retire (or die) and release their existing clients. A qualified insurance agent with some years of experience giving advice you can trust will become very hard to find. Even today, there are not many advisors who are willing to take on middle income clients with limited budgets to put towards insurance premiums.

Life Guard Insurance can give you good insurance advice

At Life Guard Insurance we believe in protecting you from any and all risks that life can through at you. Risk management is job one, and if budget allows, we build long-term cash value into your insurance policies. We are focused on providing solutions to all people in Canada, from the middle income family to the corporate executive. If you are interested in life and health insurance advice from a professional and experienced life insurance broker in your area, please contact us. We can provide a for a free, no obligation review of your insurance portfolio and give you the best life insurance advice.