Canadians Are Buying More Life Insurance

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Article Contents
Picture of By <span>Matthew Roberts</span>
By Matthew Roberts

Updated on December 11, 2024

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Picture of By <span>Matthew Roberts</span>
By Matthew Roberts

Updated December 11, 2024

Visit author page

4 minute read

Article Contents

The life insurance industry in Canada is experiencing significant growth, marked by a notable year-over-year increase in applications. This surge comes from several factors, including heightened awareness of financial security, economic uncertainties, and shifts in age demographics.

How much is the life insurance industry growing? What type of policy is the most popular right now? Read on to find out all you need to know about the increase in Canadian life insurance applications in 2024.

The Growing Life Insurance Industry at a Glance

  • In 2023, the gross written premium for the Canadian life insurance market reached $64.4 billion, with projections indicating a compound annual growth rate of over 4% from 2024 to 20281.
  • Whole life insurance continues to be the most bought life insurance policy type, accounting for approximately 68% of all policies.
  • Improvements in financial literacy and increased accessibility has led to millions of Canadians becoming aware of the benefits that life insurance provides, leading to steady increases in policy applications.

Understanding the Double-Digit Growth Across Age Groups

The growth in life insurance applications is not uniform across all demographics. Recent statistics indicate that individuals aged 61 and older are driving much of this surge, with double-digit growth rates reported in this age group. Here’s a comparison of how much each age demographic has grown in terms of life insurance purchased year-to-date, according to the data provided by the MIB group:

Age range0-3031-5051-6061-7071+
Percentage growth
compared to 2023		4.6%1.2%6.3%37.8%118.7%

While there are still decent increases in life insurance purchases from consumers under 60, the age group driving the surge is the 60+ age bracket. This divergence highlights the fact that many older Canadians are increasingly prioritizing life insurance as they approach retirement and seek to ensure their loved ones are financially protected.

Factors Behind the Rising Demand

The surge in life insurance purchases are a boon to the insurance industry driven by several factors. Here are some of the reasons behind the increase in life insurance applications:

Economic Uncertainty:

The current economic situation has prompted many Canadians to reassess their financial stability. Concerns about job security, inflation, and rising living costs have led individuals to seek out life insurance as a means of ensuring their families are protected against unforeseen circumstances.

Increased Financial Awareness:

Many Canadians have started to recognize the importance of financial planning. There is a growing understanding among people of all age groups that life insurance is not merely an expense but an investment in their family’s future security. Educational campaigns and resources have made it easier for consumers to grasp the benefits of having adequate coverage.

Demographic Shifts:

The aging population in Canada plays a significant role in this trend. As more Canadians enter retirement age, they are more likely to consider life insurance as part of their overall financial strategy. This demographic shift is prompting insurers to adjust their offerings to meet the specific needs of older clients.

Market Accessibility and Technological Advancements:

The prevalence of digital insurance platforms has made it easier for consumers to access information about life insurance products. Online tools allow potential buyers to compare policies and premiums easily, increasing transparency in the market. This accessibility has encouraged more people to explore their options and consider purchasing coverage that they may have previously overlooked due to complexity or lack of information.

Factors Behind the Rising Demand for Life Insurance

Collectively, these factors signal an environment that’s conducive to the continued growth of the life insurance sector. As education on life insurance as a financial instrument becomes more accessible, it’s predicted that many more Canadians will seek life insurance policies to secure their family’s futures.

Trends in Term Life, Universal Life, and Whole Life Policies

The Canadian life insurance market exhibits diverse trends across various policy types, with each type having drastically different demands across different age groups.

Term life insurance remains popular due to its affordability and straightforward nature. It provides coverage for a specified term – typically 10, 20, or 30 years – and pays out a death benefit if the insured passes away during that period. While term life applications have seen some declines among younger demographics recently, they continue to be a staple for many seeking temporary coverage during critical financial periods such as raising children or paying off a mortgage.

Universal life insurance is steadily gaining traction, particularly among older applicants. In June 2024, universal life applications surged by over 30% year-over-year for those aged 71 and older. Combinig flexible premiums with an investment component that allows policyholders to accumulate cash value over time, many see universal life policies as a financial strategy that they can benefit from while still alive.

Whole life insurance continues to dominate the market, accounting for approximately 68% of total premiums in Canada. This type of policy provides guaranteed lifelong coverage along with cash value accumulation at a guaranteed rate. Recent statistics show that whole life sales increased by 4% year-over-year, reflecting strong consumer confidence in this product type.

How to Navigate the Growing Life Insurance Market

As the life insurance market expands with more options available than ever before, knowing what policy is right for you is increasingly important to securing your family’s future. Here are some tips to help you choose the right life insurance policy:

Assess Your Needs:

Evaluate your current financial situation and future goals. Consider factors such as dependents, debts, and long-term financial objectives when determining how much coverage you need.

Understand Policy Types:

There are three main types of life insurance policy: term, whole, and universal. Understanding the differences and benefits of each type will help you make the best decision for your needs.

Compare Providers:

Research various insurers to compare premiums, coverage options, and customer service ratings. MyChoice can simplify this process by providing side-by-side comparisons of the best life insurance companies and ideal policies for your circumstances and budget.

Consult a Financial Advisor:

Talking with a qualified financial advisor can provide personalized insights into your specific circumstances and help you understand complex policy details.

Key Advice from MyChoice

  • Whole life insurance is still the top seller for Canadian life insurance, but universal life policies are growing explosively, especially in the 71+ age bracket.
  • Taking out a life insurance policy before turning 30 will give you the cheapest premiums due to the decreased risk factor for young people.
  • Compare similar policies from different insurers to get an idea of the best deal available for your chosen life insurance policy.

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