U.S. Workplace Insurance Sales Decline in Q1 2025, Returning to Pre-Pandemic Norms

Workplace insurance sales in the U.S. have declined in the first quarter of 2025, returning towards pre-pandemic levels after a period of elevated sales. LIMRA's recent research shows that total workplace life insurance premiums dropped 16% year over year to $1.8 billion, with nearly two-thirds of carriers reporting decreases.

This normalization follows strong demand in prior years attributed to increased worker awareness and employers enhancing benefits to attract talent amid a tight labor market. The economic environment has likely influenced employers to scale back or pause benefits packages during the first quarter, although plans to expand benefits over the next five years remain.

Within life insurance, whole life premiums grew by 6%, but both term and permanent new premiums declined by 16%. Group life insurance, dominating 93% of the market, also saw a 16% decrease, alongside an 8% drop in individual sales. Disability insurance new premiums declined by 15%, with short-term disability premiums falling 13% and long-term disability premiums down 16%. Supplemental health insurance products, such as accident, critical illness, cancer, and hospital indemnity coverage, collectively experienced an 11% drop in new annualized premiums to $1.3 billion.

These products, which represent a significant portion of supplemental health offerings, notably saw both group workplace and individual sales decline. These trends underscore a softening in new workplace insurance premiums reflective of evolving economic conditions and employer strategies, highlighting key impacts on payers and providers within the group insurance marketplace.