Life insurance payouts related to Covid-19 totalled $154M in 2020

Canadian life and health insurers paid $154 million last year in individual and group life insurance claims from deaths related to Covid-19, an industry group says.

The latest statistics published on Tuesday by the Canadian Life and Health Insurance Association (CLHIA) include details about benefit payouts related to the pandemic, as well as premium growth in life insurance and annuities.

An additional $150 million in disability claims was paid in 2020 above projections to support recovering workers.

“The crisis tested and demonstrated the resilience of the life and health insurance industry and the importance of our products for Canadians’ well being,” said Stephen Frank, president and CEO of the CLHIA, in the report.

He noted the insurers’ pandemic response, including measures such as premium reductions and deferrals, and investment in online access to benefits.

As a result of the measures, “over 26 million Canadians ended 2020 with access to medications and other health care supports — which is approximately the same number of Canadians who had coverage at the start of the year,” Frank said.

Overall, the insurers paid $14.3 billion in life insurance benefits in 2020, $36.6 billion in health insurance benefits, and $46.2 billion in retirement benefits, the report said. The total of roughly $97 billion compared to a record $103 billion in 2019, when $53.3 billion was paid in retirement benefits.

Total benefits paid for life, health and retirement have increased more than 40% from a decade ago, the report said. In 2019, that figure was 60%.

Premium growth was up slightly. Life and health insurers collected $123 billion in premium revenues last year (including $3.7 billion from foreign branches operating in Canada), the report said — up from $122 billion in 2019.

Life insurance premiums helped drive the increase, up 3.3%, followed by annuities (including segregated funds), up 1.9%. Health insurance premiums were down 2%.

Individual life insurance coverage continued to grow, accounting for 64% of total policies in force, up from 56% in 2010, the report said. The increase was driven mostly by term insurance.

Average life insurance protection per household in Canada was $442,000 in 2020, up from $432,000 in 2019.

For full details, including insurers’ investment assets and tax contributions, read CLHIA’s 2021 report.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.