Life insurance is built on a promise: to be there when families need it most. But across Canada, millions of policyholders are at risk of being forgotten. These are “orphan policyholders” — clients left without an advisor because of retirement, career change, or death.
The problem, however, runs deeper. Many long-standing life and health insurance agents lack a structured practice for proactively servicing their existing clients. The result is the same: valuable policies sit unmanaged, unreviewed and unaligned with the evolving needs of Canadian families.
In both cases, the central issue is neglect. An insurance contract is more than a promise to pay a future benefit — it is also a promise to serve from the first premium onward. Without ongoing servicing, clients often don’t understand what they own, don’t know how to exercise options, and may even see policies expire before the benefits they’ve paid for are realized.
Where Canada stands
Unlike other jurisdictions, Canada has no national servicing standards for in-force life insurance. That gap leaves policyholders vulnerable.
In contrast, the U.K. and Australia have already implemented regulatory guardrails to ensure that clients are not left behind. In those markets, insurers are expected to demonstrate how they serve policyholders throughout the life of a contract, not just at the point of sale.
Policyholder engagement remains largely reactive, highlighting a broader gap in in-force servicing standards in Canada. Moreover, clear standards of duty to policyholders have not been established.
The Role of AI
Some Canadian carriers have begun experimenting with artificial intelligence for customer engagement and retention, but no one has addressed the servicing standards gap head on. Manulife and Sun Life are using AI-driven predictive analytics to identify policyholders at risk of lapsing or surrendering and to trigger outreach efforts that improve retention. In client-facing portals, AI is being used to personalize content, streamline search functions, and improve policyholder navigation so clients can more easily understand their coverage. What’s missing is any evidence that carriers are using AI to proactively service older legacy policy blocks.These contracts remain in force and the policyholders are still clients, even after corporate mergers and acquisitions activity, or their original selling advisor leaves the business.
Artificial intelligence has the potential to be transformative in this space. Properly used, AI can help flag policies at risk of lapsing, identify clients who may benefit from a review and assist advisors in prioritizing outreach.
Technology on its own, however, cannot replace human judgment, context or empathy. Worse, without ethical guardrails, AI could easily be misapplied — used primarily to generate cross-sell opportunities or maximize profitability, instead of also ensuring policyholders receive the servicing they are entitled to.
The lesson here is clear: AI must be paired with the human factor. Algorithms can flag where attention is needed, but only a licensed and trained advisor can interpret complex policy contracts, explain options in plain language, and make recommendations that fit the realities of a family’s circumstances. This professional judgment — grounded in ethics and accountability — is what upholds the promise at the heart of our business.
The opportunity
If the Canadian industry steps forward on this issue, the benefits will be far-reaching.
- For insurers, establishing servicing standards would strengthen retention, demonstrate consumer protection, and build trust in a sector that depends on long-term credibility.
- For advisors, structured in-force servicing offers a sustainable path to deepen client relationships, unlock new revenue opportunities and prepare for succession planning.
- For consumers, better servicing means unlocking hidden wealth — sometimes tens of thousands of dollars in benefits — that might otherwise go unnoticed or unclaimed. This is not just an industry issue. It is a consumer rights issue. Policyholders have already paid for the promises contained in their contracts. The industry has a duty to ensure those promises are understood, accessible and delivered.
A call to action
Canada must move quickly. The time has come to establish servicing standards for in-force life insurance, supported by technology but anchored in human judgment and ethical responsibility.
If we fail to serve today’s policyholders, we are creating tomorrow’s crisis — one where trust erodes, value is lost and families are left without the security they believed they had. Worse still, if servicing is not built into new contracts sold today, we are only repeating the cycle, guaranteeing that the orphan policyholder problem will continue to grow. Canada has an opportunity to learn from international examples and act now. By pairing AI with the human factor, and by elevating servicing to a standard of care, the industry can future-proof itself while honouring the trust of millions of Canadians. The promise of life insurance is not just to pay a benefit someday. It is to serve policyholders every step of the way.
Rhona Konnelly is the founder of Konnelly Consulting and Insure Justice. She is a veteran of Canada’s life insurance industry and an advocate for ethical in-force policyholder servicing and consumer protection.