Advisors take note: If you actively sell voluntary employee benefits, you might do well to focus chiefly, if not exclusively, on the largest U.S. companies. For voluntary products, sales are increasingly navigating to this segment of the employer market.
For evidence of this, look no further than a new report from Eastbridge Consulting Group, which shows that companies with more than 2,500 employees accounted last year for 40 percent of sales of voluntary products. That’s up from 36 percent in 2013.
In comparison, sales to companies with 100-499 employees, the second largest market segment, topped out at 19 percent, a two percent rise from 2013. The next largest segment, businesses fielding 26 to 99 employees, held steady in market share (12 percent) between 2013 and 2014. (See charts below.)
Voluntary products — life, disability income, health and long-term care insurance, among other worksite-sold solutions — are optional benefits offered by employers where the employee pays the premium. Based on age and the amount of insurance purchased, the premiums may be less expensive than individual insurance products because of an employee group discount.
Eastbridge’s 5th annual “U.S. State ESI and EPI Data for 2014 report” includes state-by-state sales and in-force data and provides two measures that relate the data to the number of employed Americans in each state. The ESI (Eastbridge Sales Index) and EPI (Eastbridge Premium Index) provide real sales coverage (ESI) and penetration (EPI) measures on a state level.