A wide breadth of product offerings plus more attention to financial wellness in the workplace are behind the consistent growth in voluntary benefits sales, according to the latest research from the Life and Market Research Association (LIMRA).
In 2015, sales of voluntary life insurance were up 8% and sales of supplemental health insurance sales were up 4% according to the LIMRA U.S. Worksite Sales survey. Those gains mark the largest year-over-year increase in voluntary sales in the past five years, according to LIMRA Associate Research Director Ron Neyer
“For advisers, the market’s consistently growing at a stable rate,” Neyer reports.
“We’ve seen moderate sales growth for several years now.”
“If you’re not offering voluntary benefits, someone else is,” Neyer continues. “Larger businesses are going to provide more benefits because recruitment and retention is more important to them. They have a bigger population of employees, and that’s going to get them better rates from the carrier.”
Morale booster
Among the findings of the study LIMRA: 71% of employers believe voluntary benefits improve worker morale and satisfaction; nearly 60% of employees prefer to buy their health benefits at work, and half prefer to buy life insurance through work. The survey pooled responses from 46 American companies who sell voluntary insurance products.
“Critical and accident have grown by double digits for consecutive years,” Neyer notes. “It’s been an impressive run.”
Robert Shestack, Senior Vice President and National Practice Leader for Voluntary Benefits at AmWINS Group Benefits, Charlotte NC, says LIMRA’s survey is in line with findings from similar studies by MetLife, Eastbridge Consulting, and others. All of them indicate that the market for voluntary benefits is on the rise.
“As far back as we have tracked the growth of voluntary benefits, there’s only been one down year, and that was in 2010,” Shestack notes. “With the focus on financial wellness, which is bigger today than it ever has been, employees need to protect their savings. One of the best ways to do that is through voluntary benefits.”
“With the focus on financial wellness, which is bigger today than it ever has been, employees need to protect their savings. One of the best ways to do that is through voluntary benefits.”
Compared with the centuries-old life insurance market, the voluntary benefits industry is a relative child, Shestack says. But as costs have increased and the financial responsibility for health insurance has been increasingly passed to employees, this has “really opened up the door” for voluntary benefit providers to create additional business in the past five years.
“Brokers,” Shestack points out, “are going in, trying to be very strategic.” “[They’ve] got to be creative, innovative, and one of the best ways to do that is to focus on voluntary benefits.” He anticipates that more brokerages will add voluntary benefit gurus to develop subject matter experts and help refine their strategies.
“Carriers are being more creative with product, there’re more options and employers are forcing people to focus more on financial wellness,” he says. “All these factors are in play, and that’s why you’re seeing a growth in voluntary benefits.”
