Canadians Rarely Solicited by Life Insurance Agents
Most Canadians understand the importance of insurance. When you buy a car or a house, you must buy insurance – the finance company insists on this and the law requires it, especially car insurance. However, even though they know they also need life insurance, they are rarely asked to buy any.
A recent Ipsos survey discovered that nearly 70% of Canadians have never been solicited by an insurance broker or agent. Results of the survey were released at the Insurance and Investment Convention last fall by Cedric Thibault, director of Business Development, Individual Reinsurance.
According to Chantal Marr, President of LSM Insurance the reason so few people are being contacted is, “There are fewer trained insurance brokers to bring life insurance to consumers in the public marketplace. Another factor that may be playing a role in declining life insurance sales in Canada involves the National Do Not Call List (DNCL). On September 30, 2008, the Canadian Radio-Television and Telecommunications Commission initiated the National Do Not Call List. The DNCL allows Canadian consumers to remove their home and cellular phone numbers from the public phone lists often used by telemarketers. For years, the life insurance community has counted on the ability to cold-call new clients to initiate a conversation about life insurance.”
The Ipsos survey asked people how familiar they are with insurance products offered in Canada. Seventy-three percent of men said they are familiar with life insurance, but only 43% knew about critical illness insurance. The numbers were lower for women - 66% said they were familiar with life insurance while only 33% said they had heard of critical illness insurance.
When asked how important they felt it is to have certain types of insurance coverage, more women than men believed insurance is important. “Women place more importance on insurance, which should encourage the industry to adapt its sales process,” Thibault says.
Rob Anderson said in a tweet, “52% of Canadians prioritize expenses such as cable and cell phone ahead of buying life insurance.”
Only 49% of respondents considered life insurance indispensable. This percentage was higher for younger people - 60% for people aged 18-24 and 56% in the 25-35 age group, but only 46% of people 55 or older think they should have life insurance.
For critical illness insurance, 59% of women and 57% of men thought it was important. Thibault points out that the importance of critical insurance isn't currently emphasized by agents, however this is changing. Sales of this product are growing by about 10% to 15% per year and will continue to grow if agents and broker strive to explain the product better and make it more accessible to clients.
When asked about short-term or long-term disability insurance, long-term care insurance, group life insurance and critical illness insurance, the respondents that understood these products considered them very important. However, answers were quite different for home and travel insurance. Older respondents thought these were very important, while the younger crowd put them at the bottom of their priority lists.
“Did you know 30 % of Canadians don't have life insurance and 60% don't have critical illness insurance? Where will the money come from?” Milan Topolovec, Inner Orbis Inc.
The Decision to Buy
Less than half of survey respondents (49%) listed the cost of premiums as an important factor when choosing a life insurance policy. Thibault wasn't surprised by this. He said, “In fact, this also means that for 51% of respondents, the premium is not among the three key factors when buying insurance.”
The second highest ranking factor was guaranteed premiums (34%), followed by coverage details (31%), the reputation of the insurance company (29%), lifetime coverage (23%), agent or broker relationship (20%), financial advice (18%) and obtaining coverage quickly (18%).
“Canada Life Insurance offers a range of insurance and wealth management products for Canadians helping you achieve your financial goals.” Monty Loree, Green Party Campaign Manager.
The majority of Canadians prefer to get all of their insurance products and information from one company, specifically, one agent. They build a relationship with this agent and feel comfortable discussing their most personal financial details. And they like to do this face-to-face. Only 19% of respondents said they prefer talking to their broker over the phone.
“For financial direction all Canadians need are a competent life insurance agent and a broker. Finding either or both is the difficulty.” Bradley Sumner, Business, Informed Opinions, Qualified Estate Planner & Advisor.
Out of the 30% of respondents that have been solicited by an agent or broker, the majority are over 40. The survey showed that the age group most interested in purchasing life insurance is 25-35 year-old bracket. It seems like this very important demographic is being seriously neglected.
Part of the reason could be that this age group was raised on the internet. Maybe agents believe this crowd will do their insurance shopping online? Roughly 33% of respondents said they search for information online, however when it comes time to finalize the deal, they prefer to do it in person.
Approximately 21% of the people who completed the survey said they get their information from family and friends through social networks. Thibault says, “An online and social media presence is crucial for the next generation of consumers. It’s a way to reach and inform the clientele. The industry must be more aware of the need to be more present on these platforms.”