Increased demand for insurance products driven by raised awareness due to COVID-19 and a tight labor market
WINDSOR, Conn. April 5, 2022—New annualized premium for workplace life insurance, disability insurance and supplemental health products rose in 2021, according to LIMRA’s workplace benefits sales surveys.
“The year ended strong for workplace benefits sales, particularly life insurance, which recorded double-digit growth in the fourth quarter and the year,” said Patrick Leary, corporate vice president and director of LIMRA’s workplace benefits research program. “Insurance benefits remain a high priority for employees. New LIMRA research shows more than a quarter of workers list non-medical insurance benefits as one of the top five factors they consider when evaluating potential employers. As a result, employers have focused on benefits as a critical element of their recruiting and retention strategies. This played out with strong benefit sales in 2021.”
In the fourth quarter, total workplace life insurance new premium was $926 million, up 32% from fourth quarter 2020. This marks the second quarter of double-digit growth for workplace life insurance sales. Year-to-date (YTD), total workplace life insurance premium increased 14% to $3.9 billion. In 2021, new permanent life insurance premium increased 44%, and term product sales grew 9% in 2021.
Voluntary workplace life insurance premium — a subset of total workplace life insurance — jumped 60% in the fourth quarter to $614 million. YTD, voluntary life premium was $2.4 billion, a 23% increase from prior year. Growth in the voluntary market was widespread with more than 7 in 10 participating carriers reporting growth.
“Overall life insurance premium growth was driven by a significant increase in voluntary life sales,” said Leary. “COVID-19 increased worker awareness about the importance of having life insurance. We expect this increased awareness, coupled with a tight job market, to continue to propel life insurance sales over the next several years.”
In 2021, total workplace disability new premium was $3.5 billion, up 1% from the same period last year. In the fourth quarter, new premium fell 14% to $778 million. Both long-term and short-term disability products saw declines in premium.
Voluntary (100% employee paid) products drove the majority of the growth in 2021. Voluntary disability premium jumped 10%, while group disability (employer-paid) premium fell 2%. For the year, voluntary long-term disability premium rose 20%, and short-term disability premium increased 5%, compared with prior year.
Supplemental Health Insurance
Total workplace supplemental health insurance premium totaled $658 million in the fourth quarter, up 9% from fourth quarter 2020. For the year, supplemental health new premium rose 6% to nearly $2.6 billion, compared with sales from the same period in 2020.
All supplemental health product lines recorded positive growth in premium in the fourth quarter: accident insurance grew 9%, critical illness climbed 11%, cancer insurance improved 6%, and hospital indemnity experienced 3% growth.
LIMRA’s workplace benefits sales surveys for life insurance, disability insurance and supplemental health represent at least 90% of their respective annualized premium markets.
The latest data table with U.S. workplace sales trends can be viewed in LIMRA’s Fact Tank.
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