Employers continued to shy away from paying for new employee life insurance plans in 2006.
Insurers increased U.S. sales of “voluntary,” employee-paid group term life insurance 15% in 2006, to $293 million, as new sales of traditional, employer-paid group term life fell 2%, to $1.7 billion.
Employer loyalty to traditional employer-paid programs looked stronger for group life plans already in place: Although voluntary group term in-force revenue grew faster, increasing 10%, to $1.7 billion, traditional group term in-force revenue also grew, rising 5%, to $16 billion.
Researchers from Gen Re LifeHealth, a unit of General Re Corp., Stamford, Conn., reported these group life sales and revenue figures in a summary of results from a survey of 32 major U.S. group life carriers.
The relatively soft group life sales figures may be a result of the rapid increase in employers’ health coverage costs, according to Robert Hardin, chief group life actuary at Gen Re.
“Employers are getting pushed toward health care and away from things like group life insurance,” Hardin says.
Gen Re survey figures show the typical size of employers buying new traditional group life plans shrank in 2006. But, in many cases, the group life sales insurers have been making are to employers that already have group life coverage, Hardin says.
Group life insurers are selling some policies without life insurance benefits to employers, “but not nearly enough,” he adds.