There has been a shift in the way Americans think about insurance over the last several years. In 2017, most Americans expect insurance coverage through their employer–and that doesn’t just mean health insurance. The Life Insurance and Market Research Association (LIMRA) recently released a study that found that, for the first time, more Americans get life insurance through their employer, rather than through the individual market.
This new study marks the first time since 1960 that most Americans got their life insurance through their employer. According to the study, 108 million Americans now get their life insurance through their job, versus 102 million Americans who have an individual life insurance policy.
This life-insurance-via-an-employer-trend began years ago. In fact, over the last six years alone the number of Americans who receive their life insurance through their job increased by six million. There are a number of reasons for this including: changes in the labor market conditions, workforce participation rates and population growth.
In total, over the last 50 years, the number of households covered by employer-based life insurance increased by 68%. During that same time period, the number of people covered increased from 55 million to 108 million people. To give these numbers a bit of context, the previous peak for household market penetration for life insurance was 54% in 1984.
“Trends suggest the number of Americans covered by employment-based life insurance will continue to grow gradually,” says study co-author, Anita Potter, assistant vice president, workplace benefits, LIMRA. “However, growth in market penetration will be limited by population and labor force dynamics.”
Will this trend continue? Maybe. 73% of Americans believe life insurance should be provided by employers, but the percentage of employers offering this coverage is steadily declining. Clearly, something has to give at some point. What will that something be? Time will tell.