Calgarians and Albertans are severely under-insured
Calgarians and Albertans are severely under-insured
If you live in Calgary, Alberta you know about the booming economy. Even with the recent economic down-turn, the unemployment rate here remained lower than the Canadian national average. Our average incomes remained the highest of all Canadian cities. The future looks bright for Calgary and all of Alberta. The Conference Board of Canada predicts that by 2011 Alberta will once again be the economic engine of Canada, and Calgary will be its business mecca.
With all this prosperity and a promising future, you would think that financial planning and risk management would be a priority for the average person in Calgary. But, when it comes to life insurance planning, Calgarians and Albertans are drastically under-insured.
Lowest life insurance coverage in Canada
The Life Insurance Marketing Research Association (LIMRA)reports life and health insurance ownership statistics. The 2009 report showed Alberta as having one of the lowest ownership levels of personal life insurance in all of Canada. Only 50 per cent of Albertans own a life insurance policy (Calgary would have similar stats). Compare this to a national average of 55 per cent (still inadequate protection for Canadians), and provincial averages like Ontario at 59 per cent and Quebec at 63 per cent. The average sized life insurance policy in Alberta is $325,000. To cover just the 5 per cent insurance ownership gap to bring Alberta to the national average, over $40 billion of life insurance would need to be sold!
You might think that all the uninsured people don't really need personal life insurance because they have coverage through a group benefits planat work. If you were to combine personal life insurance ownership with those that have some life insurance through work, only 76 per cent of Albertans have any life insurance coverage. That means almost one in four people in Calgary are walking around with no life insurance at all. And many of these people have families who rely on them and have outstanding debts to pay.
Why the lack of coverage are people in Calgary cheap?
People in Calgary or anywhere in Alberta are not cheap. They are not more willing to take risks and roll the dice with their family's future than anyone else in Canada. From personal experience, when sitting down with clients in and around Calgary, I find them to be very willing to spend money on personal risk protection plans that make sense to them. The fault lies with the Life Insurance Industry in Calgary and across Alberta.
There are a number of factors contributing to the general lack of life insurance sales in Calgary.
The average age of insurance advisors in the province is now 57 years old. Many of these agents have built a good book of business and are living off their existing client base. There is no motivation to continue to find new clients and prospect for a new sale because they are heading into their retirement years.
Not enough new advisors are entering the business, and there is a general lack of support when they start, leading to an 85 per cent failure rate of new agents entering the life insurance industry.
Many successful agents and brokerages are focused on the high net-worth clients in Calgary, spending their time and money wooing these clients and fewer resources on the average, middle income Albertan.
Banks in Calgary have started to sell insurance through call centres or insurance kiosks, offering creditor/mortgage insurance or cheap term life insurance, and generally offering no in-depth insurance advice. People dealing with banks for life insurance coverage are usually also under-insured for their needs.
It comes down to a lack of advisors across the city and the province. There just aren't enough insurance advisors in Calgary, having enough quality conversations with average people, discussing their insurance and risk management needs. It will become even more difficult to find qualified help as the group of aging insurance agents begin to exit the industry and release their existing clients. A qualified insurance agent with some years of experience giving credible advice will become very hard to find. Even today, there are not many advisors who are willing to take on middle income clients with limited insurance budgets.
Life Guard Insurance is here to help
At Life Guard Insurance we believe in protecting you from any and all risks that life can throw at you. Risk management is job one, and if budget allows, we build long-term cash value into your insurance policies. We are focused on providing solutions to all Calgarians, from the middle income family to the oil and gas executive. If you are interested in life and health insurance advice from a team with over 45 years combined industry experience and a dedication to our clients, talk to us. We can help.
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