I’ve spent many years in the voluntary business, and there’s no question in my mind that it’s in the midst of an exciting shift and growth spurt.
In recent years, there’s been a movement to “true group” coverage for limited benefit insurance products such as critical illness and accident.
With this shift, employers can provide consistent coverage to all employees, have a simplified billing process and get away from being in the middle of the claims process.
This next generation of voluntary allows employers to offer employees the coverage they desire without significant additional work for the employer. At my company, the response has been overwhelmingly positive to our own new suite of voluntary products.
The group voluntary business is growing at a strong clip, with sales surpassing individual voluntary sales for the first time in 2011 and accounting for 55 percent of business sold, according to the 2012 Eastbridge Consulting Group U.S. Worksite Voluntary Sales Report.
The same study found that group voluntary sales increased by a whopping 148 percent from 2000 to 2011, compared to an increase of 31 percent for individual voluntary sales. The study’s group sales figures include products filed on a group platform.
To understand this trend, it’s helpful to have some background on where voluntary has been. Many of the first voluntary products sold in the United States workplace were individual life policies, serving as a valuable complement to the traditional “kitchen table” sales approach. Workplace life insurance coverage took hold, and today, 81 percent of individuals with life insurance have workplace coverage, while half of individuals look to their employer as the only source for coverage, according to a 2012 ING study.
With this success and the opportunity to provide additional benefits to employees, insurers began to branch into accident and health products in subsequent years, keeping the individual model that succeeded with life products.