Insurance — who has it and who should have it!

Insurance, whether it is being used for wealth preservation or as a safety net, has a place in our financial well-being.  Those of us who have been around for a handful of decades or more will remember that insurance companies had captive salesforces. In addition, everyone had a family member, friend, or neighbour who was in the insurance business, so we were exposed to the many reasons we needed insurance.  Today, insurance (life, disability, critical illness) is mostly brought up by financial advisors … and with approx 50% of Canadians identifying as either DIY or using a family member for advice (aka NOT having an Advisor), many are no longer exposed to insurance products.

Below you will note that only 25% of HHs with $100K+ don’t have life insurance compared to 50% of those making less than $50K.  There are many reasons for the large discrepancy including (a) having a higher-paying full-time job with benefits, (b) having (or perceived to have) enough money to get financial advice, (c) being able to afford it.

The question is: Is it a lack of knowledge or a matter of prioritizing where to spend your limited income that dictates the yes insurance/no insurance decision?

 

Now let’s look at those who have life insurance by age.

Assuming that many Canadians between the ages of 35-60 are still supporting children, either living at home or in university, then more than 1/3 of Canadians are financially vulnerable in case they are unable to work.  Not a situation you want to leave your family in …

Does that spell opportunity for Insurance companies?

 

 

(Credo’s Financial Comfort Zone Survey – results from more than 40,000 Canadians – 2016-2020)