Choosing a bigger versus a smaller insurance company
Whether you would be best served by choosing a large or a small insurance company as your provider comes down to what matters most to you and your family. There are advantages and disadvantages for each one, so the right choice will depend on you.
Below, we’ve provided some tips to help you choose. But you can also book a call with us if you need one-on-one help with deciding.
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Why choose a bigger insurance company?
There are many reasons to choose a large company for your financial security needs, such as knowing you’ll be working with experienced professionals who have been in the field for a long time. Here are some of the major benefits.
Scalability
Most of Canada’s largest insurance companies have been in business for decades — some from as long ago as the mid-1840s ′s. When a company has been around for that long, you can trust that they know how to do business in the industry very well.
Big providers like this know the ins and outs of Canadian insurance, and their history of meeting long-term financial obligations means it’s not risky to do business with them. There’s a good chance they know how to manage your policy well and that they’ll be around for years to come.
Flexibility
The largest life insurance providers can offer you the most choice for the type of product you buy and how much you’ll be covered for.
For example, you can get more than just term insurance and will probably have options to convert your policy into a permanent plan. It can be convenient to get all of your different insurance policies in one place.
And, you can get higher coverage amounts for life insurance. While a smaller insurer may only be able to cover you for up to $500,000, a bigger provider can probably offer you millions — if you need that much.
Operating hours
Bigger insurance providers are usually open later and longer and are available on the weekends too. Because they’re so large, they usually have offices all over Canada, employ a lot more people, and have brokers selling their products on their behalf.
This means you, the customer, can speak to an agent faster, whether over the phone, online, or in person.
Technology
Another huge advantage of choosing a bigger insurance company is that they have more money to spend on upgrading their technology.
They can improve the way their customers do business and make it easier to do things like get quotes, buy a policy, change your plan, submit a claim, get help, or anything else you need.
Why choose a smaller insurance company?
Working with a smaller insurance company can be a good thing, too. A lot of them are just as stable as the bigger providers, and they can give you more specific products and personalized service. Here are some of the major benefits.
Price
Smaller insurance companies may not charge you as much for some insurance products as the bigger ones in Canada do.
This can be for a lot of different reasons. For example, bigger companies may have to meet certain government requirements or they may need more funds to upgrade their technology like we talked about earlier in this article.
But just be aware that although you can save some money if you choose to work with a smaller insurance company, the cost of term life insurance policies is about the same for all the top insurance providers in Canada. So, you may not want to choose on price alone.
Features
Canada’s largest life insurance companies can be slow to decide what products or services to introduce. However a smaller insurance company can be quicker and more easily offer tailored solutions.
Many Canadian insurers of all sizes offer extra options called life insurance riders that can help you make a custom plan. However smaller companies may have unique features that fit your needs better.
Customer service
Life insurance is a long-term agreement, so you’ll want to choose a company that knows how to value its customers. A small or medium-sized company can often give you personalized service that a bigger company may not be able to.
They may not have as many clients or hundreds of spread-out employees and representatives, so their service may have more of a personal touch.
And, they can quickly make changes to their products or services based on what customers want. For example, if you want an e-policy or if you don’t want to answer too many health questions, a smaller company may be able to give you those options.
Personal preference or ethics
Some Canadians choose to work with smaller companies just because of their own principles. Some want to support a smaller, local company as much as they can.
Others may choose a mutual insurance company. Some may also want to work with a company that shares their ethical beliefs, like Christian-based companies.
