From our friends at: www.benefitspro.com

Unless you’ve been underwater holding your breath for the past several months, you know by now the voluntary benefits industry made a big splash last year. The industry woke from its pandemic-induced slumber to produce an overall growth rate of 11.3% and $8.307 billion in sales.

The “basics” — voluntary life and disability insurance — led the way, according to Eastbridge’s annual U.S. Voluntary/Worksite Sales Report. Life sales were up 25%, riding the wave of a 58% surge in universal life and whole life. Term life sales grew at a less eye-popping rate, but at 15% still exceeded the industry average. Term life also continues to represent the highest share of the voluntary market overall at 22.3%, with double the sales in 2021 of any other voluntary product except dental.

Related: Voluntary benefits and gas prices

Disability sales added to the “back to basics” theme by significantly outpacing industry growth. Long-term disability grew 20%, while short-term disability increased 14%.

Strong employee interest in more coverage

The strong sales of life and disability protection seem to indicate a renewed interest in covering the basics of financial protection, but that’s far from the end of the story. In fact, it appears to be just the beginning — and that’s good news for brokers in this market, as well as the carriers they partner with. Eastbridge’s research suggests interest in and sales of these and other voluntary products will continue to grow as the pandemic showed many workers how they help cover unexpected medical bills.

It’s true growth last year was more moderate — but still trending up — for hospital indemnity and supplemental medical products at 9%, critical illness sales at 4% and accident sales at 3%. Long-term care sales, while a very small portion of the market, rose 9%. Only cancer and vision sales declined in 2021.

But perhaps a more telling way to look at voluntary product sales is to compare the percent of employees who don’t own a particular type of coverage and their interest in buying that coverage. That’s because the gap between those two numbers could indicate a significant sales opportunity.

Take critical illness, for example. Less than a third of employees have this type of coverage, while most (71%) do not. Yet nearly half of those without coverage — 47% — say they’re interested in buying it. That’s a healthy chunk of the market open to adding more voluntary coverage to their employee benefits package. And the same is true for other supplemental health products.