Critical illness insurance in Canada is struggling to gain momentum as the product is still too new for advisors.
Critical illness insurance in Canada is struggling to gain momentum as the product is still too new for advisors, according to the assistant vice president of insurance at Manulife.
While life insurance is a staple of the Canadian marketplace, critical illness is a relative baby, which really only came to the Canadian market in the late 90s and didn’t get real traction until the early 2000s.
“The number of advisors who have been in the industry a long time are very familiar with life insurance, it’s how they were introduced to the market,” said David Baker, Assistant Vice President, Insurance, Manulife. “If you compare that to critical illness insurance… it’s a much shorter time frame to really get entrenched in the Canadian financial services psyche.”
The lack of familiarity for advisors is trickling down to consumers. An Edward Jones survey found that only 11 per cent of Canadians owned critical illness insurance, while a BMO study found 20 per cent don’t even know what critical illness insurance is.
“It’s starting to get that traction but I think there are a lot of advisors that came into the industry at a time when this wasn’t a product that was available and so whenever that happens it’s just harder for these new products to get traction,” said Baker.
Despite those numbers, Baker said Manulife’s critical illness growth has been fairly consistent. The industry as a whole is bringing in sales north of $100 million. “I think we started to see more of the recognition of the need for critical illness insurance,” said Baker.
An increased focus on advisor education could propel sales higher. “I think back 10 years ago, there was fairly significant industry efforts put forward to try and educate advisors,” he said. “More recently we haven’t seen that as much and maybe there is an opportunity to do more of that again.”
Because once the advisor’s comfort level with the product grows so will consumers’.
“My experience has been that when advisors put forward the opportunity to buy critical illness and clients are made aware of what the product can do and there is a product such as this that exists many times people are interested in purchasing this,” he said.
While life insurance is a staple of the Canadian marketplace, critical illness is a relative baby, which really only came to the Canadian market in the late 90s and didn’t get real traction until the early 2000s.
“The number of advisors who have been in the industry a long time are very familiar with life insurance, it’s how they were introduced to the market,” said David Baker, Assistant Vice President, Insurance, Manulife. “If you compare that to critical illness insurance… it’s a much shorter time frame to really get entrenched in the Canadian financial services psyche.”
The lack of familiarity for advisors is trickling down to consumers. An Edward Jones survey found that only 11 per cent of Canadians owned critical illness insurance, while a BMO study found 20 per cent don’t even know what critical illness insurance is.
“It’s starting to get that traction but I think there are a lot of advisors that came into the industry at a time when this wasn’t a product that was available and so whenever that happens it’s just harder for these new products to get traction,” said Baker.
Despite those numbers, Baker said Manulife’s critical illness growth has been fairly consistent. The industry as a whole is bringing in sales north of $100 million. “I think we started to see more of the recognition of the need for critical illness insurance,” said Baker.
An increased focus on advisor education could propel sales higher. “I think back 10 years ago, there was fairly significant industry efforts put forward to try and educate advisors,” he said. “More recently we haven’t seen that as much and maybe there is an opportunity to do more of that again.”
Because once the advisor’s comfort level with the product grows so will consumers’.
“My experience has been that when advisors put forward the opportunity to buy critical illness and clients are made aware of what the product can do and there is a product such as this that exists many times people are interested in purchasing this,” he said.
