Group whole life soars at the workplace

December 14, 2017 | Jon Shuman | Employee BenefitsPRO

The first supersonic flight was welcomed with a huge booming sound across the California desert as pilot Chuck Yeagers X-1 became the first manned airplane to reach Mach 1. The five-minute flight in 1947 was a historic moment celebrated in the film, The Right Stuff.

Another historic milestone occurred in the insurance industry last year but was greeted with considerably less fanfare. Like the flight of the X-1, though, last years event marked a watershed for Americans, at least for their financial futures.

For the first time ever, more people owned group life insurance rather than individual policies in 2016, according to LIMRA (Life Insurance Ownership in Focus, 2016 LIMRA Ownership Study). While no sonic boom accompanied the milestone, the preeminence of group life insurance spoke volumes about the credibility that Americans place in their employers as a source of financial security and wellness.

Like the X-1, sales of life insurance have gone on to notch several other remarkable milestones:

  • The number of people who own some form of life insurance has grown to a record 172 million (2016 LIMRA Ownership Study). The increase in life insurance ownership is being driven primarily by people ages 18 to 44 – the prime time for starting and raising families – as ownership by people age 45 and older declines.
  • Sales of group whole life policies, typically available on a voluntary or employee-paid basis, increased by 19 percent in the first two quarters in 2017 (LIMRA U.S. Worksite/Voluntary Sales, 2017 Second Quarter Review).
  • Premiums for individual whole life insurance have grown every year since 2006 as consumers have gravitated to the products straight-forward design, built-in guarantees, and dividend potential (U.S. Retail Life Insurance Sales, Third Quarter 2016). Whole life now accounts for 37 percent of the entire individual life insurance market, the study finds.
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