Hidden Currents

Twenty-Three Percent Fewer Employers Are Offering Life Insurance to Their Workers

Still, employees recognize its importance and value

New research from LIMRA. Visit www.limra.com

March 27 2018 — In 2017, only 48 percent of employers offered life insurance to their workers, a 23 percent decline from 2006. This continues a steady of decline in employer-sponsored life insurance since 2006 (chart 1).

While access to employer-sponsored life insurance has declined, employees continue to recognize the value of life insurance. Six in ten employees say life insurance is an important or very important benefit, regardless of whether they currently have it available to them through their employer. In fact, it is one of the top five benefits listed by employees, included with dental, medical, paid time off and retirement.

In 2016, LIMRA research revealed that more Americans rely on group life insurance than individual life insurance (108 million versus 102 million) to protect their families. This was the first time in history that employer-sponsored life insurance exceeded individual life insurance.

Among American households without benefit of group or individual life insurance, three quarters say they would have immediate or near immediate trouble paying for basic living expenses if the primary wage earner died. The number drops to about half for those households with group life insurance coverage.

Under The Surface Changes

Life insurance is not the only benefit that employers have curtailed since the Great Recession. The study, Hidden Currents: Under-the-Surface Changes in the Employee Benefits Market, revealed that benefit penetration rates are nowhere near the level they were pre-recession. Despite the improving economy, employers are cautious due to the challenges that ACA legislature is posing and increases in the average annual premium for employer-sponsored health insurance, which drive employers’ overall benefit policies.

The study shows there is a drop in the overall percent of employers offering various benefits, including medical insurance, dental insurance, long-term disability insurance and cancer insurance (chart 2).

It would appear the improved economy has not changed employers’ strategy around benefits. LIMRA finds on average, employers offered seven benefits to their employees in 2017, down from eight benefits in 2014. In addition, only 1 in 10 employers who currently offer insurance benefits plan to add a benefit in the next 18 months.

For more information on the current state of employer benefits, members can read Hidden Currents: Under-the-Surface Changes in the Employee Benefits Market. Members of the press are invited to reach out to LIMRA media contacts for additional information.

In September 2017, LIMRA surveyed 1,497 U.S. employers with 10 or more employees that had been in business for at least three years. Respondents were the individuals that made or shared in the firms’ decisions concerning employee benefits. The sample was weighted by company size and industry to be representative of the total population of U.S. employers with 10 or more employees, based on data from the U.S. Census Bureau.


Chart 1


Chart 2