Group critical illness insurance: the ultimate safeguard

In Canada, the life and health insurance industry sold 605,067 individual life insurance policies in 2024. This number is more than four times the number of individual critical illness insurance policies sold last year, which was 137,743. These figures come from LIMRA's Canadian Individual Life Insurance Sales Survey and Canadian Critical Illness Sales and In Force Survey. 

Less expensive due to risk sharing among multiple employees and the modest amounts of coverage it offers, group insurance allows employees to choose coverage that fits their budget. As a result, group critical illness insurance is becoming a gateway for those who are hesitant to purchase individual critical illness coverage. 

In 2024, group critical illness insurance premium income accounted for 0.5% of the $64.1 billion in premiums in the Canadian market, or $300 million. These statistics come from the Group Universe Report, an annual analysis by the Fraser Group that focuses on group life and health insurance market shares in Canada. In 2021, group critical illness insurance sales accounted for 0.5% of the $50B in group insurance premium revenue, according to Fraser Group.

Cruising speed  

 The CI premium growth rate is now similar to that of the overall industry.
– Ken Fraser

In an article published by the Insurance Portal, Ken Fraser, president and founder of the Fraser Group, revealed that over the past five years (2017 to 2021), critical illness insurance premiums have grown at an average annual rate of 9.4%, compared to 4.2% for all types of coverage combined.

“The CI premium growth rate is now similar to that of the overall industry,” Ken Fraser replied by email to a request from the Insurance Portal for the 2024 results.

“This is not so much that CI growth has dropped but the growth rate for other benefits has increased,” Fraser points out. He notes that premiums for other types of coverage increased by an average of 8.6% per year between 2022 and 2024.

The coverage analyzed by Fraser Group is ranked in order of importance based on the proportion of premium income: $64.1 billion drug insurance (49%), dental insurance (21%), long-term disability insurance (18%), life and accidental death and dismemberment insurance (7%), short-term disability insurance (5%), and critical illness insurance (0.5%).

Fraser noted that his company does not compile data on the number of group insurance policies.

“Growth is relatively stable,” commented Pierre-Paul Carette, Senior Director, Actuarial, Product and Contract Expertise in Group Insurance at Beneva, in an interview with the Insurance Portal. He notes that group critical illness insurance has long been “the preserve of niche and specialty insurers.” This was the case with AXA when Beneva acquired its group critical illness insurance business in 2012, Carette said.

The niche product was primarily an individual product. Over the past 15 years or so, traditional insurers have developed offerings that have become increasingly similar to those of specialized insurers, to the point of overtaking them, according to Carette. “Policyholders began to include critical illness insurance in their plans like any other traditional coverage, such as health care, life insurance, and disability insurance,” says Carette.

Since 2012, Beneva's critical illness insurance sales grew “impressively” before stabilizing over the past five years, Carette points out.

Affordable safety net 

 Critical illness insurance provides a safety net.
– Sophie Ouellet

In an email exchange, Sophie Ouellet, Vice President, Business Development, Group Benefits, at Sun Life, writes that critical illness insurance is an affordable way for employers to add value to a group benefits plan, “since it can be offered on an optional basis (voluntary enrollment).”

Ouellet adds that it is another way for them to attract and retain employees. She says various sectors are interested in Sun Life’s Group Critical Illness Insurance product. “More than 60% of our critical illness insurance sales are to clients in the service, manufacturing, and construction sectors,” she revealed.

“Critical illness insurance provides a safety net for people facing serious health problems,” Ouellet points out. She adds that this insurance coverage replaces lost income and covers additional costs related to the illness. In her view, this reduces the risk of debt and financial stress during recovery. 

Pierre-Paul Carette reveals that 20% of Beneva groups have signed up for group critical illness insurance, either mandatory or optional. He says that the market has raised the bar in terms of covered illnesses, with basic coverage for six illnesses and optional coverage for many more. “Our comprehensive product covers 40 conditions,” he says. 

As few as two employees  

A comparative table prepared by InsuranceINTEL in 2024 shows that 10 insurers offer group critical illness insurance in Canada: Assumption Life, Beneva, Canada Life, Co-operators Life, Blue Cross Life, Empire Life, Equitable, iA Financial Group, Manulife, and Sun Life.

The accessibility of critical illness insurance is underlined in this table. Six insurers offer it to groups of as few as three employees. These insurers are: Assumption Life, Canada Life, Co-operators, Blue Cross Life, Empire Life (two products), and Sun Life.

Manulife stands out by offering group critical illness insurance to groups of two employees.

Beneva and Equitable reserve their products for groups of at least five employees. iA Financial Group offers Critical Illness Insurance to groups of at least 10 employees, and ExtensIA Critical Illness Insurance, an optional product, to groups of at least 11 employees.

Limited insured capital  

It is not possible to insure for $1 million or more in group critical illness insurance, as is possible with individual critical illness insurance. The most common insured capital limit is $250,000.

With Co-operators offering, only groups of 100 or more employees can insure employees for up to $250,000. Groups of three insureds are limited to $10,000 in insured capital per employee. Sun Life does not insure employees for more than $200,000, nor does Blue Cross Life.

Beneva stands out by agreeing to insure employees for up to $600,000 in the event of critical illness. With iA Financial, it is possible to insure an employee for up to $300,000 if the employer chooses the optional (i.e., voluntary) coverage of the Critical Illness Insurance product rather than the basic version. Its optional ExtensIA Critical Illness Insurance product offers an unconditional limit of $250,000.