Although the number of life insurance policies sold in Canada has been declining for the past 15 years, it would be wrong to think the outlook is bleak. On the contrary, the industry needs to reinvent itself and work to win back a segment of the population it has gradually moved away from.
That was the message from a panel held in March at the 2025 Advocis Symposium, hosted by Canada's largest association of independent life insurance advisors.
The insurance market is still strong, said Phil Marsillo, who held the position of President of the Canadian Association of Independent Life Brokerage Agencies (CAILBA) when the event took place. He is also President and CEO of managing general agency IDC Worldsource. One reason, he explained, is that clients now have access to a broader range of resources to get information and choose the policy that best suits them.
After annual losses of around 100,000 life insurance policies between 2010 and 2023, sales began to rebound two years ago, a turnaround partly driven by uncertainty during the COVID-19 pandemic.
Last year, Canadian beneficiaries received $9.2 billion in death benefits. For Marsillo, that proves that life insurance products and related services are available and accessible to Canadians.
A challenge and opportunity
Despite that accessibility, there's still "huge potential" for expansion, said Brent Lemanski, Assistant Vice-President, Member Engagement, at LIMRA and LOMA Canada.
“We've done a number of brand-new pieces of Canadian research over the last 12 or 18 months, and there's still tremendous opportunity, and it's not as skewed as you might think it to be. […] Our research would suggest that about 30% of Canadians, something like 8 million of the buying public, still has a need and desire for more coverage. And there becomes an issue around how do they access it, how do they get information, how do they qualify that? And so I would argue that this is both an opportunity and a challenge,” he said.
“The real opportunity may lie at the lower end, in the middle-class market,” replied Stephen Frank, President and CEO of the Canadian Life and Health Insurance Association (CLHIA).
That customer group has been largely neglected in recent years, he pointed out, while the industry has focused on landing wealthier clients. And yet, those with higher net worth aren't necessarily more inclined to buy insurance.
“I do think we have to recognize that collectively we are over time chasing the higher net worth. We've got to figure out a solution for that middle tier. There's a huge opportunity and they're the ones who really need the advice. They don't, in a lot of cases, even understand why they would need the product,” Frank said.
Marsillo added his perspective. He says he was at an event with some company executives and was told they haven’t been solicited and have an insurance need. His response? “You’re asking why consumers aren’t buying more where you’re in the business, you know you have a need, you manufacture the products, you have tons of advisors you can talk to—and you haven’t reached out. So how do you expect a consumer (to figure it out)?”
A more human touch
To reach that segment of the market, Lemanski argued for a more personalized customer service experience—whether in person or via virtual meetings.
“If you look at our industry historically, there are a number of things that just have not changed. People die, people become disabled, people retire. People love their families. They need to look after those things going forward. What has changed is the environment around which we provide those solutions,” he said.
He emphasized that even if life insurance products are more accessible online, if the client doesn’t understand the differences between offerings—or doesn’t feel that the product fits their needs—they won’t complete the transaction. That’s why advice and human connection still matter.
Frank agreed. While artificial intelligence and new technologies may help with sales and brokerage operations, he said nothing will replace customer service when it comes to understanding and addressing individual needs.
Meeting needs more effectively
In that sense, guidance to help consumers make informed decisions is essential—whether to buy a product for the first time or to switch to one that better matches their current situation.
“For decades, there's been this need gap, a difference between what consumers feel they should have and what they have,” Lemanski noted.
A 2024 LIMRA study revealed that 30 per cent of Canadians had expressed a need for life insurance—or to enhance their existing coverage—but failed to act. The reasons: lack of knowledge or discouragement tied to economic uncertainty.
On this point, Marsillo struck a more cautious tone than his fellow panelists. “We don't have all the answers to make a statement to say everybody's underinsured. (…) And further, I'd also add, given the economic situation, at the lower end and even the mid-family, people trying to afford homes, pay for their kids, pay for education, where are they going to get the extra money...” he said.
“Today more people are probably covered spouses, partners in the household with some group insurance as well. So, do they have more coverage or not? So again, these are opinions. I don't have all the facts to make a decision to say, `you know, we're done, this industry's over, we're not doing our job’. I’m not there quite honestly.”
The best product is the one the client buys
Marsillo also emphasized that to succeed, insurance advisors and salespeople need to work together to recommend the product that best fits the client’s needs.
“What's the best product? It's a simple answer. If your client has insurance at the time of claim, that is the best product they could have. Par (participating life insurance) isn't always a solution. UL (Universal life insurance) isn't always a solution. Term (insurance) isn't always a solution, right? It's a variety. As long as the consumer has coverage that they need, that's what matters.”
