Despite widespread layoffs, sales of many voluntary employee benefit products shone brightly in the dismal economy of 2009, according to year-to-date data from LIMRA International, Windsor, Conn.

Worksite firms polled by LIMRA reported sales up 7% overall, with substantial gains for term life, accidental death and dismemberment and long term disability products.

(LIMRA’s survey does not include data for the market leader, Aflac Inc., which has an estimated 30% of the market. An Aflac executive reported sales were up for voluntary products but would not say by how much.)

Overcoming a lackluster performance early in the year, sales of life insurance products in the workplace were up 14% by the end of the third quarter, while voluntary health products rose 3%, LIMRA reports.

Term life product sales grew 22%, overcoming a 7% decline by universal life products and a slim rise in whole life sales.

Term sales may be up at least partly because of the policies’ relatively low cost compared to other voluntary benefits, Ron Neyer, a LIMRA analyst, believes.

The difficult economy also may be causing workers to refocus attention on protection products, Neyer adds.

“Term is an affordable option, and if you don’t have a lot to spend but realize you need life insurance, it may be a safe way to go,” he says. “They may want something more permanent later.”

Robust sales were also reported for voluntary AD&D policies, long term disability, critical illness and dental plans.

A third quarter surge helped AD&D bounce back from two years of declining sales. Premiums for the product overcame a mediocre first half, when sales were barely even with the same period of 2008, Neyer notes. By Sept. 30, AD&D premiums were up 15% over the same period the year before.

That was a sharp jump over 2008, when premiums for the product were down 28% from the previous year.

Figures for AD&D actually may be understated, because many life insurance policies sold in the workplace include AD&D riders, notes Neyer.

Vision product premiums were up only 2% YTD, says LIMRA, but that was a big improvement over the first 9 months of last year, when vision plans fell 27%.

Over last few years, some workplace products such as long term disability have fluctuated quite a bit, LIMRA data shows. Last year, LTD was down 6% by the end of the third quarter, and 14% for the year, but by the end of third quarter 2009, sales of the product were up 11% YTD.

There was no strong move this year by employers to replace their paid benefits with voluntary products, Neyer said. “But some are asking employees to share more of the cost, not just in medical but also with disability.”

A total of 34 worksite carriers participated in LIMRA’s survey. The top 10 companies account for about three-fourths of life and health premiums, Neyer reports. Of the 34, 18 saw life-health premiums increases of 5% or more, LIMRA reports.

A survey of worksite producers by Eastbridge Consulting Inc., Avon, Conn., found confidence was up at midyear for the first time since the recession started late in 2007.

“The industry has always been somewhat recession proof,” says Bonnie Brazzell, vice president of Eastbridge. “We’re confident the industry is going to continue to grow.”

People see a need for life insurance, Brazzell says. “As employers cut back, employees are left with self-insuring or not insuring,” she says. “They think, ‘what will happen if I was injured, and nothing was coming in?’ People just recognize the need for protection, and it’s more acute to them when the economy is doing badly.”

Carriers in the industry took a number of steps to keep sales healthy during the year.

Ron Agypt, head of broker sales for Aflac, Columbus, Ga., says his company spent sizeable resources on beefing up broker support this year. Aflac’s new benefit sign-up system can handle enrollments by both salaried and commissioned salespeople, Agypt says. Aflac also brought in 100 broker-development coordinators to serve as its points of contact with brokers, and it appointed 15 vice presidents to support their efforts. The company also increased its own sales force of independent producers by 5%.

An important move for Aflac was its purchase of Continental American Insurance Company, enabling it to diversify into group products.

“We had over 30% of market share, but almost all of that has been in individual sales, notes Agypt. The new subsidiary is now known as Aflac Group.

Among product moves the company made this year was the addition of an accident, sickness and life insurance combination package, available for as little as $12 a week. It also lowered its short term disability eligibility requirements to as few as 3 employees, down from a minimum of 5. And it began offering a disability income-protection policy for employees working less than 20 hours a week.

A number of worksite carriers have used technology to simplify benefit enrollment. For instance, Guardian Life Insurance Company of America, New York, made significant investments in enrollment technology that makes it easy for employees to fit worksite benefits to their needs and to change their choices online.

Guardian also developed turnkey sign-up programs that enable employers to stage enrollment meetings relatively painlessly and to personalize enrollment materials in both English and Spanish, notes Elena Wu, group marketing officer for Guardian.

Voluntary products have been a growing part of group sales for Sun Life Financial U.S., Wellesley Hills, Mass., says Wesley Thompson, president. Voluntary “is now about 30% of new premiums for our new group sales,” he says.

Randy Stram, vice president of institutional business for MetLife Inc., says his company this year has been trying to sell employers on offering employees a suite of voluntary benefits, rather than single products. Employers are looking for more bundled solutions because they don’t have the resources to evaluate individual products, he says.

As employers shift more benefit costs to employees, they have also been looking for more decision-support tools for benefit selection, to help employees pick the voluntary products that fit their needs, he observes.

“The economy has been a wake-up call for employees,” says Stram. “They need to understand their life insurance, disability income plans and so on, to see what makes sense for them.”