Table of contents
The system of organizations providing life insurance services in Canada can be divided into 4 main classifications as follows:
1. Big Five Life Insurers
How “large” these companies are ranked based on total assets. These companies include:
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Manulife: Canada’s largest insurance company, has premium sales of about $40 billion a year.
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The remaining 4 companies are: Canada Life, Sun Life, Desjardins, and Industrial Alliance (iA).
Source: PolicyAdvisor
2. Banks providing insurance services
All of Canada’s 5 largest banks (called the Big-Five) offer life insurance. However, under Canadian law, these banks are not allowed to sell insurance plans directly at branches or on the bank’s main website. All of them have been sold through subsidiaries or through insurance companies. For example, CIBC and Scotiabank sell home & car insurance through Desjardins’ subsidiary system.
3. Small & Non-Profit Companies
These companies often provide services to niche markets, e.g., customers with a history of human illness, or particularly high-risk populations. Or, there are companies that specialize in providing the main insurance service for homes, cars, but still include life insurance. Such small companies are many, so I cannot say all the details here.
Which insurance company to choose, to say it all, is never enough. Each company will have a different strength, for example, Desjardins is strong in Critical Illness Insurance with coverage of up to 26 critical illnesses, CanadaLife has insurance packages for people with medical histories. Comparing companies may not be easy, especially if you intend to compare prices. To compare the prices of 2 insurance products, you need to spend time researching deeply to know the factors affecting the price of insurance, such as: age, gender, compensation value, conversion features, other services with life insurance, etc. Therefore, in addition to choosing a long-standing, reputable and reputable insurance company, I think it is still more important to choose a reliable insurance consultant. No?
4. Insurance companies/brokers
Unlike agents, who are employees of an insurance company, consulting only one company’s own products, brokers are independent companies/brokers, advising customers on insurance products of different companies. The choice to work with an agent or a broker has its own advantages / disadvantages.
There is a friend who once made a very good analogy like this, I borrowed his example to put here. Choosing an agent or a broker to buy insurance, just like when you buy a TV, you can choose to go to a Samsung store to buy a Samsung TV, or choose to go to Best Buy to buy any TV. Sometimes he chooses to enter a Samsung store because he has a friend who is a salesperson at Samsung, or simply because he likes the Samsung brand. The benefit of the photo here is that he can get reliable advice from his friend. In addition, Samsung employees will surely have much, deeper, and more correct knowledge about Samsung products themselves. But the risk will be that this employee will praise his product and criticize other brand products. Egoistic bias is possible even if the Samsung employee himself is not aware of it. And if the other brother chooses to buy a TV at Best Buy store, he will have more options, each brand has 1 different strength. However, usually with limited capacity, the employee at Best Buy may not understand the product information of all TV brands. The risk is that the other employee may not advise on the right needs, or he may be more inclined to advise customers on products with higher commissions. In short, every choice has two sides. So I think the most important thing is still to choose who you trust to entrust your decades of savings, and the inheritance you are leaving for the next life. Even if you choose a policy that only pays $20 a month, you need to think about the $250,000 your child will receive when you go away. It’s your child’s whole life later.
Through this, I think you also have enough overview of the insurance industry market in general, and life & health insurance in particular in Canada. Details of other related issues such as: how to choose insurance products accordingly, laws related to consumer protection, etc. I will write in more detail in the following articles.
Sarah Do
Licensed Travel, Health & Life Insurance Advisor