A recent LIMRA study revealed that 57% of Canadian adults have life insurance coverage, a three-point increase from 2019. Despite this growth, 30% of Canadian adults report having a coverage gap. The Canadian life insurance market expanded by 7% in 2024, reaching a record-high $2.04 billion, primarily driven by strong sales of whole life and universal life insurance policies.
Market Trends and Shifts
The independent distribution market share has grown to 85% from 81% in 2020, while career agents’ share decreased to 14% from 19% in the same period. There’s been a noticeable shift towards larger policy sizes and higher premiums, with several carriers focusing on high net worth consumers. Advisors are also catering more to affluent clients.
Dominance of Participating Whole Life Products
Participating whole life insurance remains the dominant product in Canada, accounting for more than 60% of the total market share. Consumers prefer these products due to their permanent nature and the cash value component that can be used for loans. Advisors appreciate them as part of a broader retirement strategy and for their tax benefits. Whole life premiums rose 10% to $1.4 billion in 2024, continuing a growth trend that started in 2019.
The market for whole life insurance is highly consolidated, with the top three companies controlling nearly 70% of new whole life sales. In contrast, term life insurance products, popular among middle-income and younger consumers, accounted for 53% of new policies but saw sales decline by 2% to $372.5 million in 2024.
Future Outlook
The Canadian life insurance industry’s prospects for 2025 are uncertain due to fluctuating economic conditions. Carriers are likely to continue competing for market share by enhancing their participating whole life products. However, the current political and economic climate could significantly impact the industry’s growth trend.
“Understanding the product market trends may help the industry focus on the products that will have the greatest success and help more Canadians get the coverage they need,” according to the study. Matthew Rubino, a senior research analyst with LIMRA’s Individual Product Research, notes that the industry’s trajectory will depend on how carriers adapt to changing market conditions.
