The last year or two has been relatively good to the life insurance industry overall. After a long period of people dropping their policies over personal financial concerns, it seems that many are now finally starting to get back into carrying such coverage, and that in turn has boosted sales for many companies in the industry overall.
The total number of voluntary insurance sales rose 4.3 percent on a yearly basis over the course of 2013, to a level of $6.644 billion, according to the latest annual U.S. Worksite/Voluntary Sales Report from Eastbridge Consulting Group, an evaluation of more than 60 insurers that includes both group and individual coverage. Of that amount, the single largest portion - 28 percent - went to life coverage, marking the largest portion of the market it's taken up at any point in the last five years. In all, the value of those sales came to $1.881 billion last year, up 22 percent from 2012 alone, making it one of the fastest-growing types of insurance coverage in the industry.
The breakdown for life coverage
When it comes to specific types of life insurance coverage, the vast majority of consumers opted for term coverage, the report said. In all, these policies took up 76 percent of all purchases, up from 72 percent a year earlier. Sales value also rose 29 percent during this time. Meanwhile, both universal life and whole life policies also enjoyed minor upticks, with sales rising 3 percent. Term life in particular was one of the policies, across all insurance types, that took the biggest step forward.
Other types of insurance that enjoyed positive movements over the course of 2013 were disability sales (up 8 percent to $1.367 billion), and these made up 21 percent of the voluntary coverage market, the report said. Interestingly, though, long-term disability sales in particular were only up 2 percent, while short-term coverage increased 11 percent and constituted slightly less than 7 out of every 10 sales for disability policies overall.
Life insurance companies probably see these facts as positive steps, but the fact remains that many consumers may still be wary about the costs they'll face for this kind of coverage. As such, the more they can do to highlight the value that life policies provide, the better they might be able to take advantage of the improving economic situation.