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BMO Financial Group

August 05, 2015 08:45 ET

BMO Wealth Institute Report: Half of Canadians Worried That if They Passed Away Their Families Would Not Cope Financially

- Forty-three per cent of Canadians have or intend to purchase life insurance

- Fewer than one third are confident that their financial plan has addressed their insurance needs

- Only 49 per cent feel that they have some understanding of the insurance products best suited for their life stage

TORONTO, ONTARIO--(Marketwired - Aug. 5, 2015) - The BMO Wealth Institute today released a new report examining Canadians' use of insurance to protect themselves and their families against the unexpected. The report, titled Insuring for a Financially Secure Future, found that half of Canadians (51 per cent) are concerned that, should they pass away, the financial well-being of their family would be put in jeopardy, with just over one quarter (26 per cent) feeling very concerned.

Despite these anxieties, the report shows that many Canadians are underinsured:

  • Although it is the top type of insurance policy purchased by Canadians, fewer than half (43 per cent) say they own or will purchase life insurance in the next 12 months.
  • One third (thirty-one per cent) of Canadians do not have any of the following insurance policies: life, travel, accident, disability, critical illness or long-term care. This percentage increases to 37 per cent for Boomers (ages 55-64).
  • Only one third (31 per cent) are confident that their financial plan has addressed their insurance needs to mitigate risks.

"Life is unpredictable and Canadians are clearly anxious about what would happen to their family in the event of death or an unexpected illness or accident, so it's concerning that so few feel that their insurance needs are being met," said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. "A financial professional can help you prepare for the unexpected by incorporating insurance into a comprehensive financial plan that reflects your priorities in the current stage of your life and ones you may have in the future."

Insurance for Every Life Stage

The report also looked at the types of insurance that Canadians in different age groups currently own or will purchase in the next 12 months:

Millennials
(ages 18-34)
Generation X
(ages 35-54)
Boomers
(ages 55-64)
- Life (46 per cent)
- Travel (42 per cent)
- Accident (33 per cent)
- No insurance in place (24 per cent)
- Disability (20 per cent)
- Life (44 per cent)
- Travel (33 per cent)
- No insurance in place (33 per cent)
- Accident (22 per cent)
- Critical illness (21 per cent)
- Travel (41 per cent)
- No insurance in place (37 per cent)
- Life (32 per cent)
- Accident (27 per cent)
- Long-term care (15 per cent)

Half of Canadians felt they had some level of understanding about the insurance products most appropriate for their life stage (49 per cent), with only 16 per cent feeling they have a very good understanding.

"As life changes, insurance needs change as well," said Rocco Casullo, Head, Direct to Consumer Insurance, BMO Insurance. "It's important to educate yourself about the products that will provide the most benefits for you at your particular stage in life. There are plenty of online resources available, making it easier than ever to research the insurance options available to you. A financial professional can clarify and further expand on the information you find online to help you determine which type of coverage is best for you."

BMO offers tips on the best insurance products for different life stages:

Millennials: Life insurance protects what young people are working hard to build in terms of their personal and financial goals by laying down the foundation for the protection of future loved ones. Other types of insurance that Millennials should consider purchasing include critical illness insurance, accident insurance and travel insurance.

Generation X: For Gen Xers who are settled into a career, critical illness and disability insurance become very important for individuals, and even more so with families, who are dependent on their ability to earn an income. Generation X should also consider life insurance and creditor insurance.

Boomers: Long-term care insurance is particularly beneficial to those who have left the workforce; they cannot benefit from disability insurance if they are no longer earning an income. Permanent life insurance should also be considered for estate planning purposes.

For those in retirement: Consider retirement income options that help protect and ensure a sustainable and steady source of retirement income. Travel insurance would be helpful to snowbirds in case they need to pay for the costs of emergency medical treatment while away from home. Permanent life insurance and medical insurance may also be beneficial to retired Canadians.

For more information on wealth management news at BMO please visit http://www.linkedin.com/company/bmo-wealth-management-services-canada?trk=top_nav_home.

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About the BMO Wealth Institute

The BMO Wealth Institute provides insights and strategies around wealth planning and financial decisions. The Institute's team of professionals have deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.

About BMO Financial Group

Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of approximately $633 billion as of April 30, 2015, and more than 47,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.

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