Canada is home to more than 150 life and health insurers, according to the latest data from the Canadian Life and Health Insurance Association (CLHIA). Of these, around 80 provide life insurance policies to an estimated 22 million Canadians, with coverage totalling $5.1 trillion.
Over four-fifths (82%) of policies are purchased by individuals privately through an agent or advisor, while the rest are group plans secured by employers. In 2020 – the most recent figures available from CLHIA – the average life insurance protection per household in the country reached $442,000, up from $432,000 and approximately five times the household income from the previous year.
Canadian life insurers also paid out $14.3 billion in benefits during the period. About $8.4 billion, or 59%, of these payouts were in the form of death benefits, while $5.9 billion was given to living policyholders as disability compensation, cash surrenders, or dividends.
These numbers indicate how Canada has become among the world’s life insurance hotbeds. The nation currently hosts several industry giants and provides a range of coverages not just for Canadian citizens and residents but also to clients across the globe.
How does life insurance work in Canada?
Life insurance is often considered a critical type of cover, helping grieving family members soften the financial impact of losing a loved one. With the right policy, this form of protection can aid families in paying off loans and debts and provide them with the monetary means to meet daily living expenses.
Life insurance plans work by providing a tax-free lump-sum payment to the policyholder’s family after they die, and are one of the most common types of insurance available. Coverage is available in several variations but generally falls into two categories – term and permanent policies – with each type offering different levels of protection.
1. Term life insurance
As the name suggests, this type of policy covers the policyholder for a set term. It pays out a death benefit if the insured dies within a specified period, meaning they can only access the payment in the years when the plan is active. Once the term expires, the policyholder has three options: renew the policy for another term, convert it to permanent coverage, or terminate the plan.
policyholder can replace at any time without needing to inform the affected individuals, and irrevocable, who cannot be changed unless the insured secures written permission from the beneficiaries.
What are the largest life insurance companies in Canada?
Several major life insurance companies call Canada their home. To find out which ones cater to the largest number of clients, life insurance brokerage platform PolicyAdvisor assessed each one based on a range of metrics, including length of existence, financial strength, written premiums, and overall assets. The list below is ranked based on annual premiums. Here are 10 of Canada’s biggest life insurance providers, according to the insurtech firm.
1. Manulife
Year established: 1887
Headquarters: Toronto, Ontario
Financial strength rating: A+
Annual premiums: $39.2 billion
Total assets: $200 billion
2. Canada Life
Year established: 1846
Headquarters: Winnipeg, Manitoba
Financial strength rating: A+
Annual premiums: $36.4 billion
Total assets: $219.7 billion
3. Sun Life
Year established: 1865
Headquarters: Toronto, Ontario
Financial strength rating: A+
Annual premiums: $20.9 billion
Total assets: $173.2 billion
4. Desjardins
Year established: 1948
Headquarters: Lévis, Québec
Financial strength rating: –
Annual premiums: $9.2 billion
Total assets: $39.8 billion
5. Industrial Alliance (iA)
Year established: 1892
Headquarters: Québec City, Québec
Financial strength rating: A+
Annual premiums: $8.6 billion
Total assets: $58.3 billion
