For the First Time in History, More Americans Are Covered by Employment-Based Life Insurance than by Individual Life Insurance

Impacted by population growth, workforce participation rates, and labor market conditions

WINDSOR, Conn., — Nov 21, 2017 – A recent LIMRA study finds that 108 million Americans have life insurance coverage through their workplace, compared with 102 million covered by individual life insurance. This is the first time the number of people covered by workplace life insurance has surpassed those covered by individual since LIMRA has been tracking U.S. life insurance ownership in 1960.

Over the past 50 years the number of Americans covered by employment-based life insurance has increased significantly (nine million in the past six years alone) spurred by environmental forces such as population growth, workforce participation rates, and labor market conditions.

The number of households covered by employment-based life has increased by 68 percent (to 57 million), while the number of people (adults and children) covered has almost doubled (from 55 million to 108 million).

Market growth limited, however

“Trends suggest the number of Americans covered by employment-based life insurance will continue to grow gradually,” says study co-author, Anita Potter, assistant vice president, workplace benefits, LIMRA. “However, growth in market penetration will be limited by population and labor force dynamics.”

The rate for employment-based life insurance peaked at 54 percent of American households back in 1984. Since that time, household market penetration has gradually declined, and now equals 46 percent. At the person-level (adults and children), market penetration increased steadily through 2004 when it peaked at 37 percent. The person-level ownership rate dropped by five-points in 2010, but has rebounded slightly and now equals 34 percent.

Americans overwhelmingly believe employers should be required to make life insurance coverage available (73 percent). Yet, the percent of employers offering coverage is gradually declining. Making matters worse, a dilemma facing the industry is that once employees make a benefit selection most rarely revisit their decision and almost half (44 percent) never change their life coverage.





This 2016 LIMRA study, Employment-Based Life Insurance Ownership Trends (2017), is based on a sample of 4,167 households. Respondents have primary or shared decision making responsibility about finances, investments, and insurance in their household. The sample contains quotas for 30 age-income segments. The study sample was weighted to the U.S. household population by age, income, race and region.