How a Rise in Life Expectancy Impacts Your Life Insurance

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

Updated on February 3, 2025

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

Updated February 3, 2025

Visit author page

4 minute read

Article Contents

Life expectancy in Canada has increased dramatically over the past century, reflecting advances in healthcare, improved nutrition, and a strong social safety net. Today, many Canadians can reasonably expect to live into their 80s or beyond, an achievement that also poses unique challenges for businesses and government agencies. In the insurance sector, for instance, longer lives require constant recalibration. Insurers must adapt policies, premiums, and risk models to an aging population that remains active and engaged well into later life.

How much did Canada’s life expectancy improve over the past century? Is the life expectancy the same for every province? How about for men and women? Read on to learn about the factors that affect Canadian life expectancy and how this longer lifespan can affect insurance products.

Life Expectancy in Canada At a Glance

Average Life Expectancy in Canada Over the Years

Thanks to historical data, we can see how far Canada has come in terms of public health and standard of living. Here’s how the life expectancy rate has risen over the years:

Early 20th Century (1900s-1940s):

Life expectancy in Canada was much lower at the turn of the century, averaging in the 50s. Infectious diseases such as tuberculosis and polio, along with a lack of modern medical interventions, contributed to higher mortality rates.

Mid-20th Century (1950s-1960s):

During this period, the introduction of antibiotics, vaccines, and better maternal-child healthcare contributed to a notable decrease in infant and childhood mortality rates. As a result, the national average life expectancy climbed into the 60s.

Late 20th Century (1970s-1990s):

Canada’s healthcare system continued to evolve, and the influence of social welfare programs grew. This era saw a focus on chronic disease management, the advent of new diagnostic tools, and improved emergency care. By the 1980s, life expectancy in Canada was pushing into the mid-to-high 70s.

Early 21st Century (2000s-Present):

With the continued advancement of medical technology, Canadians now routinely live into their 80s. Health policy reforms also targeted lifestyle diseases, such as heart disease and diabetes, improving survival rates and quality of life.

Average Life Expectancy in Canada Over the Years

Regional Variations

Despite Canada’s universally admired healthcare system and overall high living standards, life expectancy figures do exhibit notable regional variations. These disparities are often due to differences in demographics, economies, and access to specialized healthcare services across the country. Here’s how the life expectancy can differ throughout the provinces:

Generally, provinces like British Columbia, Ontario, and Quebec have slightly higher life expectancies compared to the national average. Urban centers in these provinces often have better-funded hospitals and greater access to medical specialists. They also benefit from diverse economic opportunities, contributing to better overall health outcomes.

Some of the Atlantic Provinces – such as Nova Scotia, New Brunswick, and Prince Edward Island – report life expectancies that are slightly below the national average. These provinces may have larger rural populations, where distance from specialized medical services can impact the timeliness of treatment.

In Yukon, Nunavut, and the Northwest Territories, there can be a more pronounced gap in life expectancy. Indigenous communities, for example, have historically faced systemic challenges, including limited healthcare access, higher rates of chronic disease, and other socio-economic hurdles. These factors can contribute to lower life expectancy rates in these regions compared to the Canadian average.

Life Expectancy in Canada: Men vs Women

Across the globe, there is a consistent phenomenon that women tend to live longer than men. While this is also true for Canada, the life expectancy gap is slightly narrower than the global average. Globally, the life expectancy gap between men and women is five years. In Canada, the gap is only four years, with men living to 80 years and women living to 84 years on average.

Impact of Rising Life Expectancy on Life Insurance

The rise in life expectancy is a positive for all Canadians. However, it does have some implications for both insurers and policyholders. As people live longer, insurance companies must adjust their products and pricing to maintain sustainability. Here are some ways that an extended lifespan affects insurance companies:

Premium Adjustments

One of the most direct consequences of prolonged life expectancy is its impact on insurance premiums. Suppose individuals, on average, are healthier and at a lower risk of dying within a given age range. In that case, insurance companies may have the flexibility to offer competitive or slightly lower premiums, especially for younger age brackets.

On the other hand, longer lifespans increase the duration that insurers will be responsible for paying out policies. Insurance companies rely on a balance between incoming premium payments and future benefit obligations. Insurers may need to adjust premium structures throughout a person’s lifespan to maintain sufficient reserves.

Extended Retirement Horizons and Annuities

For many Canadians, retirement planning includes some form of insurance-backed annuity to guarantee income later in life. With the average person living longer, retirees risk outliving their retirement savings. This is often called “longevity risk” and has some effects on the insurance landscape.

As the population remains in retirement for a longer period, annuities that guarantee lifetime income become more valuable. However, this also makes the cost of these annuities higher for the insurer. Consequently, these products may see premium adjustments or altered payout rates to reflect increased longevity.

Balancing Affordability and Profitability

Due to the longer life expectancy, insurers face the challenge of providing affordable products to consumers while securing profitability for the company. Some insurance companies may implement strategies such as:

  • Adjusting Age Limits: Companies may allow new policyholders to purchase insurance at older ages. While this expands market opportunities, it also requires careful actuarial planning since the likelihood of claims rises significantly with age.
  • Redefining Policy Durations: Increasingly, insurance providers may offer more flexible term lengths to accommodate people’s evolving financial responsibilities over their longer lives.
  • Investing in Preventive Care Initiatives: Some insurers encourage healthier living by offering wellness programs or discounts for meeting certain health milestones, potentially reducing long-term claims.

Key Advice From MyChoice

  • Buying a life insurance policy at a younger age will allow you to get a good annual premium compared to buying life insurance later in life.
  • Review your life insurance policy regularly and adjust your coverage as you move through different life stages.
  • If you are concerned about critical illness, disability, or long-term care, you can add riders to your life insurance policy.

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