In 2024, the voluntary benefits sector saw impressive growth, continuing its upward trajectory following the post-pandemic rebound. According to the U.S. Voluntary/Worksite Sales Report by Eastbridge Consulting Group, total sales of voluntary benefits reached a record-breaking $9.53 billion, marking a 2% increase over the previous year. In addition, in-force premiums grew at a robust 6.1%, bringing the total to an all-time high of $56.6 billion.

This growth signals a growing recognition among employers and employees of the value that voluntary benefits offer in supporting employees' health and financial well-being.

1. Strong Growth in In-Force Premiums Reflects Greater Employer and Employee Engagement

The most notable growth in the voluntary benefits sector was seen in in-force premiums, which increased significantly by 6.1%. This uptick indicates that more employers and employees are choosing to retain their voluntary coverage, reflecting a stronger commitment to long-term benefits. Nick Rockwell, Eastbridge's president, noted that while voluntary sales growth slowed slightly from the high levels of the post-pandemic rebound, the sustained increase in premiums is a promising sign for the industry.

These figures highlight the growing appreciation of voluntary benefits and their importance in enhancing the overall employee benefits package. As employees seek more flexible and personalized options, voluntary benefits such as critical illness insurance, hospital indemnity plans, and life insurance are proving essential.

2. Supplemental Health Products Drive Growth in 2024

In terms of product categories, supplemental health benefits led the charge with the largest sales increases. Among these, critical illness insurance saw the most significant growth, with a 13% increase in sales. Similarly, hospital indemnity and supplemental medical products grew by 7%.

This surge in health-related voluntary benefits can be attributed to the increasing concern over healthcare costs and the growing recognition that traditional insurance plans do not always cover the full spectrum of employees' needs. As healthcare costs rise, employees are looking for supplemental coverage that offers added protection against unexpected medical expenses.

3. Group Voluntary Products Remain Dominant

Group voluntary products continued to dominate the market, making up 78% of total voluntary sales in 2024. Sales in this category grew by 3%, maintaining a stable trend of steady demand among larger companies. In contrast, individual voluntary products saw a slight decline, with a 1% decrease in sales.

The prevalence of group benefits reflects employers' ongoing interest in offering comprehensive benefits packages to their employees. Larger employers, in particular, are better positioned to offer a range of benefits, including group voluntary products, which can be more affordable due to collective purchasing power.

4. Strongest Sales Growth in Larger Businesses

The report found that businesses with 2,500 or more employees experienced the strongest sales growth in the voluntary benefits market, with an increase of about 6%. This growth is consistent with the trend of larger businesses offering more extensive benefits packages, including voluntary benefits, to attract and retain top talent.

On the other end of the spectrum, businesses with fewer than 10 employees saw the largest decline in voluntary benefits sales, down by 14%. This drop may be attributed to smaller businesses having fewer resources to offer comprehensive benefits packages, as well as the challenges faced by small employers in providing voluntary benefits at scale.

5. Market Trends and Future Outlook for Voluntary Benefits

Looking ahead, the report signals continued growth in the voluntary benefits market, driven by several key trends:

• Employee demand for flexible, affordable benefits continues to rise as employees seek greater control over their benefits choices.

• Health-related products, including critical illness insurance, hospital indemnity plans, and supplemental medical coverage, will remain strong growth areas as healthcare costs remain a significant concern.

• Larger employers will continue to lead the way in offering comprehensive voluntary benefits packages, while smaller businesses may face challenges in providing competitive offerings.

As the market evolves, employers will need to stay attuned to the changing demands of their workforce and continue to tailor their voluntary benefits offerings to meet those needs.

A Growing Market with Potential for Expansion

The 2024 U.S. Voluntary/Worksite Sales Report from Eastbridge Consulting Group underscores a positive outlook for the voluntary benefits market. While growth in sales has slowed slightly compared to the post-pandemic surge, the continued increase in in-force premiums and the expansion of supplemental health products signal a maturing market with strong potential for future growth.

Employers who invest in voluntary benefits can enhance their employee offerings and improve satisfaction, while employees gain access to critical coverage that can provide peace of mind. As this sector continues to evolve, both employers and insurance providers will need to adapt to the changing needs of the workforce, ensuring that voluntary benefits remain an essential part of the benefits landscape.