Demand for life insurance outpaces supply

A new survey finds that employees are interested in buying life insurance as a voluntary benefit, but many don’t—because their employers don’t offer it.

The survey, conducted online by The Harris Poll on behalf of insurance group OneAmerica, polled more than 2,000 U.S. adults 18 years or older, among whom more than 1,000 are employed full- or part-time.

Related: How to reach today’s potential life insurance buyers

The results of the survey showed that 27 percent of respondents have voluntary life insurance. Of those who don’t have that benefit, 68 percent say they would be somewhat or very likely to purchase life insurance—if their employer offered it.

“September is Life Insurance Awareness Month, and the information gathered by The Harris Poll provides further proof of the strong desire for employed Americans to have access to long-term solutions to protect the financial future of their families,” said Jim McGovern, senior vice president of employee benefits at One America. “For most employees, the workplace is the only opportunity they have to purchase life insurance.”

Among the findings of the survey:

• Male workers are significantly more likely to have voluntary life insurance products. The survey found that 31 percent of men had purchased voluntary life insurance products through their employer, compared with 23 percent of women workers.
• Workers tend to purchase lower-value plans. The survey found that 30 percent of those with voluntary group life insurance through their employer reported they have more than $100,000 in life insurance coverage. Again, men were more likely to purchase the higher level of coverage. The second-most popular coverage window was the $51,000 to $100,000 level, with 28 percent of employees purchasing that level of coverage.
• Lack of availability of voluntary life insurance options offered by employers was by far the biggest reason that workers said they did not have this type of coverage. Only 11 percent said they thought the coverage would be unaffordable; 13 percent cited other obligations or expenses; 11 percent said they did not see the value of such coverage, and 10 percent said they were healthy and did not need it. But nearly half, 48 percent, said the reason they did not have this type of coverage was because their employer did not offer it.

According to McGovern, life insurance is one of the most important employer-offered benefits for the financial wellness of middle America. “Companies who offer voluntary group life insurance keep their own benefits costs low and give their employees a valuable, lower-cost life insurance option than the employees turn to in the individual insurance marketplace,” he said. “Many employers believe that group life insurance isn’t something that would attract the type of workers they’re looking for, but as our survey shows, that’s untrue. We need to do more to educate companies and workers on this valuable and cost-effective core foundational benefit.”