- The majority of canadiens are underinsured.
- Most canadiens do not have an adequate amount of coverage (too much or too little) because they do not review their needs regularly.
- Most people overestimate the actual cost of owning life insurance due to numerous myths and past business practices in the industry.
10 Interesting Life Insurance Facts
Here's a list of 10 life insurance facts that will help guide you when it comes to making an informed decision regarding your families well being.
Have you thought about buying life insurance? Perhaps you have read an article in the newspaper, or you have come across an advertisement online encouraging you to obtain life insurance coverage.
You could also be a consumer of an existing life insurance contract that still has some doubts about the purchase. You might be wondering if you made the right decision or whether you have the right kind of life insurance and coverage for yourself.
Having life insurance can offer excellent security and peace of mind for you and your family. Its purchase is, however, an important decision to make. Get it right the first time by taking the time to shop around, selecting premiums that fit your budget, choosing a death benefit proportionate to your need and, of course, choosing a reliable insurer and representative.
When buying life insurance, you have the option to purchase term life insurance or permanent life insurance. Term life insurance has an expiry period, meaning that you are covered for a specified number of years. When you die while the term insurance is still active, your beneficiaries get a payout in the form of the death benefit. Permanent life insurance covers you for your entire lifetime. It means that if the insurance is in force and you pass away anytime, whether, in two months or fifty years, your beneficiaries are guaranteed their payout. Choosing what kind of life insurance to buy will depend on several things such as the period you want to be covered, what you can afford for premiums and your beneficiaries.
About 60% of Canadians have a form of life insurance, whether it be a personal contract or group policy provided by an employer. This represents more than half of the country’s population. But do people really know the facts about life insurance? Some people will just sign the contract and start paying monthly premiums without giving it much thought. On the flip side, others may be skeptical and end up postponing to buy life insurance. Some don’t want to think about the possibility of dying. They hope for the best and live on.
10 Life Insurance Statistics
Life insurance is a product sold by insurance companies. Like any other product, the target consumers always have opinions about life insurance. Some view it in a positive light and others not so much. Many people enjoy complaining about having to pay for insurance. However, families are always happy to have it when tragedy strikes. In other words, just because we can't see it's usefulness in our day-to-day activities, does not make it any less essential.
Here at Emma, we are in the business of protecting families and firmly believe that insurance is but one piece in a much larger financial plan. That is why we strive to offer affordable and budget-friendly policies to a variety of people with different needs. Below, you will find a list of 10 interesting life insurance facts that will help guide you when it comes to making an informed decision regarding your families well being.
1. Most People Overestimate the Cost of Life Insurance
Many people think that life insurance is just too expensive. The thought of paying the life insurance premiums makes them cringe. But it turns out that 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.
Life insurance may seem expensive, but if you looked at the big picture, you would quickly change your mind. What is paying a couple of hundred dollars a year when your dependents may receive hundreds of thousands of dollars in return. In any case, not having life insurance can quickly become a costly mistake that could influence the future of your dependents if you do not have any other form of financial protection. Without life insurance and any large form of liquid savings, they may be forced to pay for your funeral using their own savings as well as any unpaid mortgages or loans.
One thing is for sure, life insurance is much more affordable than you may have been lead to believe. Instead of speculating, why not get the facts straight by talking with one of our certified experts here at emma.ca.
2. 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 underinsured. They have purchased life insurance coverage that won’t be enough for their beneficiaries.
Intriguingly, 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. Our life insurance needs evolve during our entire lifetime, starting high at the beginning of our active life and decreasing as we approach retirement. Most people do not reevaluate their needs as time goes on. It is therefore not very surprising to know that the majority of canadiens are underinsured.
The primary purpose of life insurance is to act as a financial safety net for your family in case of premature death. Put yourself in their position, by not having enough life insurance to cover your debts, family expenses fully and lost income, you are leaving your grieving family with additional problems. Now, in addition to trying times, they have to budget without your income and incur costs they had not prepared for.
3. Canadians Own $4 Trillion In Life Insurance
As of 2018, Canadians owned over $4 trillion in life insurance coverage. Yes! You read that right. It is a good thing knowing that more people are embracing life insurance. While it may seem like such a huge figure, also keep in mind that we are talking about millions of people. Therefore, looking at it individually, this figure might not be as much as it seems.
4. Many Canadians Don’t Review Their Insurance Needs
As previously mentioned in fact #2, most people do not review their insurance needs. The Edward Jones study revealed that only just over a quarter of Canadians took the time to review their life insurance needs annually. The life insurance coverage you initially purchased may not be enough for your current situation. This is because our needs evolve as time goes on. Our net cash flow varies; we take on loans, we accumulate savings, we start investing and our salary increases. The family might also get bigger, meaning that what was sufficient five years ago might no longer be.
The life insurance coverage, therefore, needs to be adjusted over time. The fact that many people do not review their policies is most likely a cause that contributes to the population being underinsured. This mainly stems from a poor understanding of the policies purchased and a lack of financial literacy.
5. Many People Rely On Group Insurance
The statistics show that the proportion of the population relying on group insurance alone has kept rising in the last few years before coming to a halt. The 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.
For those who can still access group insurance, the plans may not be adequate or tailored to individual needs, likely also contributing to the Canadian population being underinsured.
6. Most People Prefer Life Insurance That Doesn’t Require a Medical Exam
Medical exams aren't high on the list of many people's favorite past times. A doctor’s or nurse's visit to determine how much you will have to pay for premiums does not sound very appealing to most consumers. No one enjoys being reminded of the extra weight they have put on or likes to worry that they might be diagnosed with some strange disease. Whatever your reason, know that many people would like to avoid the doctor’s exam when underwriting.
7. An Average Funeral Costs Between $5000 and $10,000
Funerals are expensive. The amount required for your burial may be too much for the family if you don’t have a life insurance policy. It is for this reason that you should look into a way to cater to your final expenses. It could be a simple life insurance policy that only takes care of these costs.
Your loved ones will already be overwhelmed by your death, and you don’t want to add to their grief by subjecting them to financial stress.
8. The Earlier You Buy Life Insurance, The Less You Pay?
If you want to pay less in terms of premiums, start early. Life insurance companies are happy when you live longer, and they, therefore, have cheaper premiums for the younger buyers. This is because of the reduced health risks in younger people.
9. Think About Naming More Than One Beneficiary
Has it ever crossed your mind that your beneficiary might die before you? Not a pleasant thought, but things can happen. To be on the safe side and avoid too many complications, it can be a good idea to think of naming more than one beneficiary (or replacement beneficiary) so that the death benefit be accessible quicker.
10. Many Insurance Shoppers Would Love to Shop Online
Who doesn’t want convenience? Most of the insurance shoppers would love to do it online. Almost half of the people who purchase life insurance look for information online before approaching the insurance company of their choice. We at Emma Life Insurance are all about offering you convenience and great prices. With Emma, you can buy insurance in the comfort of your home or during lunch break at work.
Many people believe the myths about life insurance, something that can make them put off buying life insurance. Knowing the facts is undoubtedly a step in the right direction to protected one's loved ones.