For insurance agents and wealth planning professionals, the past two years have been a period they will never forget. Largely in response to the COVID-19 pandemic, life insurance policies sales and similar products have soared.
Annuity sales in 2021 reached nearly $255 billion, (a 16% jump from the previous year), employer-based life insurance purchases topped $648 million in the third quarter of last year (a 29% surge from the corresponding three-month period in 2020) and among individual life insurance policy sales, those recorded double-digit growth for three quarters in a row, according to figures compiled by LIMRA.
While the acquisition of several of these financial instruments would have happened regardless of world events, polls show the effects of the coronavirus inspired these purchases. In the early fall of 2020, for example, a majority of respondents (57%) indicated they felt a certain sense of responsibility to obtain life insurance out of concern for their family, whether more of it or a new policy.
“As the country is experiencing the next wave of COVID-19 infections, more people may be recognizing that the pandemic and current economic conditions are going to persist well into 2021,” Alison Salka, senior vice president and head of research at LIMRA, said at the time.
Global events have a way of shaping society’s perceptions, intentions and actions. But, human nature is also very “in the moment,” where once a challenge fades away, what was once prioritized at the time gets set aside or abandoned entirely.
With COVID-19 mitigation efforts (e.g. masking, social distancing, vaccination requirements, etc.) winding down as positive cases and infections start to wane, it raises the question: Will the growth in life insurance buying continue in 2022 and beyond? Early indications suggest that that answer is yes, based upon general polling data, sales results and individuals’ greater sense of gratitude for what they have.
Employers are prioritizing non-medical workplace benefits
Generally speaking, when people hear the term “benefits,” it usually refers to employer-based health insurance. However, an increasing number of business owners are diversifying their offerings with other incentives, such as disability insurance, life insurance premium financing for key employees, paid paternity leave, maternity leave and life insurance at a much higher rate than they did prior to the pandemic.
Tracing back to 2006, fewer and fewer employers have included life insurance as part of their benefit packages. In 2006, for example, approximately 62% of organizations (with at least 10 people on their payrolls) in the United States made life insurance available to their employees, according to LIMRA. That rate dropped to 61% in 2009, to 52% in 2014 and to below 50% (48%) in 2017.
But that trend line is now going in the opposite direction. In more recent polling analysis also led by LIMRA (2021 Insurance Barometer Study), 57% of workers said they got their life insurance through the company for which they worked.
As for whether employers foresee themselves continuing to offer life insurance or other non-medical workplace benefits, nearly 70% of large organizations (employing 1,000 people or more) reported they expect to provide the same perks that they do currently five years from now. This sentiment was shared by two-thirds of midsize employers (between 100 and 999 workers).
Not only that, but according to Patrick Leary, who serves as corporate vice president and head of benefits research at LIMRA, it’s likely employers may even offer additional or more generous benefit packages.
“Our study finds three quarters of employers (76%) believe their employees will expect a wider variety of benefits options in the future,” Leary explained. “Employers see benefits as a necessary tool to be able to compete in the war for talent. Despite 54% of employers reporting a decrease in revenue in the last year, the vast majority are not planning to cut back on benefits and almost half are considering offering a customized menu of benefits to help attract and retain talent.”
And the reason for it has a lot to do with how COVID impacted employees’ thinking process as to the things in life that are truly worthwhile and worth caring about.
In the same survey, close to 50% of respondents said they had a greater appreciation for insurance benefits in a post-pandemic world than they did before the coronavirus. For life insurance in particular 44% said they considered it a top workplace benefit; and one they considered important for their employer to make available.
Renewed sense of optimism
But it isn’t just life insurance that employers and people in general appreciate more than they did in the past. They’re also more appreciative of life and the satisfaction they get from the little things that they may have once taken for granted.
Dan Witters serves as a research director at Gallup for the polling organization’s National Health and Well-Being Index. In a recent podcast for the polling outfit hosted by Mohamed Younis, Witters noted that the percentage of Americans who consider themselves to be thriving has reached a high not seen in more than a decade. In fact, with 59% indicating as much, it’s an all-time high for the measure.
When Younis asked Witters why Americans are more positive about their current circumstances, Witters said he thinks COVID has played a role in providing people with greater perspective about how quickly things can take a turn for the worse and why holding on to hope is so important. Additionally, with conditions getting back to some semblance of normalcy, the return has buoyed spirits by helping people reconnect after so much time spent alone.
Between the revitalization in life insurance sales — both for individual and group policies — and Americans’ rediscovering the things that matter, wealth planning professionals are poised to experience more business in the years ahead. For more information on life insurance premium financing solutions and why it can work for your clientele, contact us at Global Financial Distributors today.
