This month is financial literacy month in Canada. So how do Canadians fare when it comes to understanding insurance?
According to the Government initiative, Financial Literacy Month “encourages Canadians to take concrete actions to better manage their money and debt, including making a budget, having a savings plan and understanding their financial rights and responsibilities.”
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When it comes to insurance literacy, and particularly the kind that can most affect personal and family finances, Michael Aziz, SVP of sales for Canada Protection Plan, a Canadian life insurance company, said Canadians are lacking – and that needs to change.
“Everything I have been reading lately is about planning your budgets, planning your retirement, people not being able to pay their debts … but nobody is really talking about insurance,” he explained.
“You’ve got all this record debt, and I don’t think people are protecting themselves in case something happens. I believe people still think they don’t need insurance … or they say, ‘I’ve got enough insurance’. But they don’t know how much ‘enough’ is, they just know they have something through work.
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“Some people think, ‘I’ve got lots, I’ve got one-time salary [coverage].’ Ok, say you make $75,000 a year, so you’ve got $75,000 coverage – does that cover your mortgage, cover your kids’ education, cover funeral costs? I don’t think we’re doing a great job of letting people know … about that big risk component.”
Now, during financial literacy month, it should be another wake up call to brokers – there are insurance options for all clients, and it’s a matter of educating them, Aziz said.
“People who have faced their mortality want the coverage. We have to educate the others that they need it,” he said.
“Insurance just isn’t a pleasant topic. But people will talk about mortgages and they’ll talk about debt, but nobody wants to talk about [insurance]. As an industry we have to create the need a bit better and be more marketing focussed.”
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