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Workplace Life, Disability and Supplemental Health Products Record Double-Digit Growth in Q3

Insurance Forums Staff

New annualized premium for workplace life insurance, disability insurance and supplemental health products increased significantly in the third quarter 2021, according to LIMRA’s recently released workplace benefits sales surveys.

“After the disappointing results in 2020, workplace benefits sales have rebounded in 2021,” said Patrick Leary, corporate vice president and director of LIMRA’s workplace benefits research program. “In a very competitive job market, employers recognize the need to offer a robust benefits package to attract and retain the best talent. Our research suggests non-medical benefits to rise at least 20% over the next five years.”

Life Insurance

In the third quarter, total workplace life insurance new premium was $648 million, up 29%, compared with third quarter 2020. Year-to-date (YTD), total workplace life insurance premium increased 7% to $2.9 billion. In the first nine months of 2021, new permanent life insurance premium increased 13%, representing 14% of the workplace life insurance sold. Term sales grew 6% YTD, holding 86% market share for the workplace life insurance market.

“Our research finds that COVID-19 has raised workers’ awareness about the importance of workplace life insurance. In a recent survey, half of workers said workplace life insurance was more important to them due to the pandemic,” Leary said. “This increased employee awareness, coupled with a tight job market, should continue to propel life insurance sales over the next several years.”

Voluntary workplace life insurance premium—a subset of total workplace life insurance—jumped 50% in the third quarter to $395 million. YTD, voluntary life premium was $1.7 billion, an 11% increase from prior year. Growth in the voluntary market was widespread with more than 60% of participating carriers reporting growth.

Disability Insurance

Total workplace disability insurance new premium was $515 million in the third quarter, 11% higher than prior year. YTD, total workplace disability new premium was $2.7 billion, a 5% increase from the same period last year.

Voluntary (100% employee paid) products drove the majority of the growth. Voluntary disability premium jumped 12% in the first three quarters, while employer-paid premium increased just 1%. In the first nine months of 2021, long-term disability premium rose 4%, and short-term disability premium increased 6%, compared with prior year.

Supplemental Health Insurance

Total workplace supplemental health insurance premium totaled $4.4 million in the third quarter, up 16% from third quarter 2020. YTD, supplemental health new premium was $1.9 billion, a 4% increase from the same period in 2020.

All supplemental health product lines recorded positive growth in premium in the third quarter: accident insurance increased 18%, critical illness rose 6%, cancer insurance grew 9%, hospital indemnity jumped 25% and other supplemental health benefits* increased 33%.

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.

*Other supplemental health products represents products that do not fit the other categories, such as gap insurance, minimum essential coverage plans, limited benefit medical, and heart/stroke products.



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