April 20, 2016

Financial Concerns

Personal Insurance Ontario

Nearly 25 million Canadians have some form of personal insurance spread out across 100 insurers in the Canadian market. In 2014 these firms made about $13.7 billion in income. More than 60% of the revenue was gobbled by the six biggest personal insurance companies totalling about $8.3 billion. With a population of about 14 million Ontario is the fifth largest province in the country.

The province has about ten major companies that offer personal insurance policies. from the possibility of risks such as death, illness, injury or their attendant expenses. Personal insurance  Ontario is one of the major branches of insurance, the others being business, homes and auto insurance. Some personal insurance policies are mandatory by law while some are optional.

 

Types of Personal Insurance

Life insurance: This cover pays a tax-free lump-sum amount to you or your named beneficiaries in the event of your death or expiry. There are two types of life insurance; there is term insurance and whole life insurance.

Critical illness insurance: This personal insurance policy pays a lump sum in the event of diagnosis of a significant medical condition e.g. cancer, Leukemia or heart attack that is covered in the policy.

Long-term care insurance: This policy covers your care costs if you are recommended for care whether at home, in a private, or government owned care facility. This policy comes in handy particularly for the aged.

Health insurance: This insurance covers the medical costs that are not included in your provincial health insurance. It is your extra cover in case you exceed your cover limit.

Disability insurance: This insurance policy makes a monthly payment that replaces your income to the stated amount if you can no longer work because of injury or illness. Disability can be categorized into short-term and long-term insurance. There is also individual disability insurance, key person disability program, high-limit disability insurance and workman’s compensation.

 

Ontario’s Insurance Statistics

Ontario’s residents spend an average of $5500 on personal insurance covers and premiums. This cost is about 5% of their overall income. Even then, the ownership of both individual life, and group insurances have fallen spectacularly over the years. This move is risky considering an estimated 32% of Canadian families only have two months reserve of income, while 33% of households would suffer if the primary breadwinner were to pass away.

About 65% of the families need some form of insurance to survive yet very few have considered it. Part of the reason few people take up these policies have to do with longer life spans. In 1900 75% of citizens died at age 65, right now 70% will surpass that age limit. The other primary reason people don’t buy premiums is that they think they can’t afford it. When polled about the average costs of most insurance policies many respondents quoted figures four to five times higher than the actual expenditures.

 

The Future of Personal Insurance

As part of rectifying the industry’s inefficiencies there are a few things the Ontario personal insurance providers can do.

First, they need to simplify the insurance products. Most people have very minimal idea of what products are out there, what differentiate one from another, and which policy will suit their lifestyle and needs.

Secondly, they need to change the purchasing and application processes. This change includes simplicity in marketing, product wording, application processing, and calculations.

Thirdly, they need to tailor their marketing and products to target the younger consumers. Most likely the older generations have some form of personal insurance. To be able to achieve this the industry will have to embrace some of the choices and perspectives of the younger generation

 

Reporting a Personal Insurance in Ontario

This is a simple seven-step process. Once you contact your personal insurance Ontario provider, you will have to avail the following information as soon as you incur or learn about the incident.

  1. Your name, company name and contact details
  2. Your policy number, or submission ID

III. The type of loss that you are reporting

  1. The date and time the incidence occurred
  2. The location where the loss occurred
  3. A Description of the loss