Canadians Want Life Insurance, But No One is Selling it to Them

Posted on June 5, 2012 and updated September 1, 2013 in Group Benefits, Insurance Types, Life Insurance Canada News 5 min read
young businessman
Many who are uninsured
haven’t heard from
an insurance broker.

Apparently. life insurance brokers are not working hard enough and resting on their laurels.

This, after a new survey from Deloitte revealed that 62% of uninsured individuals have not received an unsolicited offer to buy life insurance in the past year, compared to 44% of insurance buyers.

The survey was called “The Voice of the Life Insurance Consumer” and it also uncovered that 30% of people without insurance say their employer doesn’t offer life insurance as part of their benefits package. Those uninsured also said that 66% of them had not looked for life insurance by their own initiative, while 46% of buyers said the same.

Many life insurers are not dealing directly with prospects,” Deloitte Research Insurance Leader Sam Friedman told Insurance Networking News. “Instead, insurers distribute their products through agents and financial planners. Part of the challenge facing carriers is how to work more proactively with their agency force to provide the tools, marketing and advertising support to better educate consumers about everything life insurance can do for them and their families and create more demand for their products and services.”

However, unsolicited approaches among older insurance buyers were less influential according to survey respondents. About 70% of buyers age 50 and older say that such tactics don’t affect their decisions as much, compared to only 12% of those age 26 and under. The same stats were apparent among the uninsured as well.

“Among a variety of other steps, insurers are getting more involved in social media to highlight to a younger generation especially the importance of financial protection,” American Council of Life Insurers spokesperson Jack Dolan told Insurance Networking News.

In fact, LSM is among those looking to connect on twitter, so why not follow us and stay up to date? The trend towards social media is an important one, as the Deloitte study showed About 32% of current buyers and 27% of non-buyers did a general Web search about life insurance, while another 21% of buyers and 16% of non-buyers had surfed specific insurer websites. In addition, 8% of buyers and 10% of non-buyers had surfed insurance agency websites.

The survey further revealed that 45% of non-buyer respondents included life insurance among their top five financial priorities and 21% ranked it in their top three. Life insurance ranked even more prominently among those who already have life insurance with 70% putting life insurance among their top five priorities and 34% included it in their top three.

But the importance of working with a broker to coach you through the application process was also highlighted, as its complexity is a major deterrent to people buying insurance. About 26% of respondents found the application and underwriting process too difficult, according to Deloitte.

“The process could be discouraging many prospects from going through the application process because invasive medical tests may be required, such as blood and urine tests,” Deloitte’s Friedman said. “In many instances, insurers can make the process easier and faster by using predictive analytics, eliminating the need for invasive tests for many prospects and speeding up the sale without compromising the integrity of the underwriting process.”

Life insurance through an employer was an emphasized as a great gateway to get more people buying life insurance. The stats don’t lie, and they said that among the non-buyers, 37% of those who had life insurance in the past reported that the workplace was a big source of sales, with 43% automatically securing a policy through their employer and 20% buying additional benefits through their group plan. Only 16% had bought coverage on their own through an agent compared to 13% through an insurance carrier. And 5% bought through a group or professional association.

“Life insurers could work more closely with employers to promote automatic and voluntary life benefit options since many of those surveyed prefer to buy coverage through their places of work,” Deloitte’s Amoroso said.

It should be noted that group life insurance policy do not always provide the best solution.  The coverage generally ends when the insured terminates his/her employment and while they can convert their  coverage the cost is based on their age at the time they leave their company and the insurance company builds a buffer into the pricing on the conversion option. Most optional group life plans are based on 5 year terms so the cost can get prohibitive as the insured gets older and optional group life plans are not available with a rating so hard to insure applicants may not qualify.

avatar
Jay
Jay

Life Insurance is intangible asset people do not realize the impact it can have on someone life.

The broker or the insurance company has to show them that a piece of paper can impact the lives of generations.
Without it people lives can be shattered and irreparably damaged. With it opportunity can be created.

LSM Insurance
LSM Insurance

Thanks Jay – you make some excellent points.

Philip
Philip

The reason more people don’t buy insurance is they are too many agents out there looking to make a quick buck.

LSM Insurance
LSM Insurance

Hi Philip,

Thanks for the note. It sounds like you had a bad experience – sorry to hear that. While there a few bad apples, the majority of brokers are looking to good job for their clients. A few steps to make sure you get the tight broker 1) Ask how long they have been in business 2) Check for any complaints 3) Do they have any industry designation and 4) Are they willing to let you speak to any of their existing clients to verify the level of service you can expect.

Ted H
Ted H

Part of the reason people are not buying more life insurance is that too many insurance guys are out to make a quick buck.

Pressure selling is just way to prevalent among these people, whu would I buy something from someone trying to shove it down my throat

LSM Insurance
LSM Insurance

Ted sorry to hear about your bad experience. I think the vast majority of brokers and agents are reputable and trustworthy but like in any profession there are always going to be a few bad apples.

Jason
Jason

Their insurance agents are probably too busy watching the Leafs.

LSM Insurance
LSM Insurance

We’re cheering on the Leafs hopefully that doesn’t upset some of our visitors but we are still happy to help out even on game nights 🙂

LSM Insurance
LSM Insurance

We are only licensed to sell life insurance in Canada. Term Life Insurance premiums seem to less in the United States. But it depends on the type of plan and the features are often different. Canada has far more Guaranteed Permanent Life Insurance options – this would aslo impact your conversion options on a term policy down the road.

Clevel
Clevel

I have dual citizenship. Are life insurance rates cheaper in Canada than the United states?

I am 53 and I’m in good health, a little but of High Blood Pressure.

LSM Insurance
LSM Insurance

Thanks for sharing Ted. James Hilton noted in this article https://lsminsurance.ca/life-insurance-canada/2012/03/the-market-for-life-insurance-and-investment-books.
that “there are 80,000 advisors in Canada who are selling life insurance and the average age clocks in at about 60.”

Ted S
Ted S

I think there is a real shortage of quality agents in our industry. Years ago before the MGA model began to dominate distribute agents were hired and trained but this seems to have stopped. New people in the industry are not given the tools necessary to show people why life insurance is needed. Life insurance is one of the greatest products in world the problem is it is a secret to too many people. They either do not know about or do not understand how the product can impact their lives. The great Ben Fieldman gave the anology of how… Read more »

LSM Insurance
LSM Insurance

Thanks Harry. It may be the way you approach these people – life insurance can be a sensitive topic. You have to develop a level of trust before people begin to open up. The trust level can be developed through an introduction from a friend or colleague. Social Media and Off Line Networking is also a great way to meet people who may benefit your services.

Harry
Harry

It’s starnge everyone I approach says that they are not interested. Who are these 62%?