Interesting Facts
Many people believe the pervasive myths about life insurance, not knowing many of these facts about insurance in Canada:
Most people overestimate the cost of life insurance.
Many people think that life insurance is just too expensive. The thought of paying the premiums makes them cringe. It’s one of those expenses we often question. However the public tends to exaggerate the cost of life insurance—in fact, many people think life insurance is three times its actual price. As a result, some people end up not buying life insurance at all, leaving their families in a potential state of crisis.
Most Canadians don’t have enough coverage.
While it is commendable that many Canadians have a form of life insurance, it is worth mentioning that most of them are under-insured. They have purchased life insurance coverage that won’t be enough for their beneficiaries. It may be that they purchased it when they were younger, however their lives have changed and the amount of insurance needs to reflect that. A study, conducted in 2017 by Edward Jones, revealed that just about 16% of the population of Canada had life insurance that could cover their remaining mortgage payments if they passed away. Many of the insured had $100,000 or less in coverage.
Canadians own $4 trillion in life insurance.
As of 2018, Canadians own over $4 trillion in life insurance coverage. It is a good thing that more people are embracing life insurance. Since most Canadians are under-insured, this may seem like such a huge figure, but keep in mind that we are talking about millions of people. Therefore, looking at it collectively, this figure might not be as much as it seems.
Many Canadians don’t review their insurance needs.
Needs evolve as time goes on—our net cash flow varies, we take on loans, we accumulate savings, we start investing, and our salaries change. Families may also get bigger, meaning that what was sufficient five years ago may no longer be. Our life insurance coverage, therefore, needs to be adjusted over time.
Many people rely on group insurance.
Statistics show that the proportion of the population relying solely on group insurance has continued to rise in the last few years. The concurrent rise of contract-based workers and self-employment however, means not many people can get, or are even eligible for, group life insurance from their employers. While your group coverage may seem like enough, it is best practice to regularly reevaluate your needs and coverage.