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Group ancillary benefits sales cool after 4-year growth streak
LIMRA data show workplace life new premium inched down in 2025 even after a late-year rebound, while supplemental health products declined for three straight quarters.
For four straight years, the group ancillary benefits market grew steadily, supported by a tight labor market and employers increasing use of voluntary benefits. In 2025, growth stalled, and new LIMRA data indicate the slowdown goes beyond a single rough year. Workplace life insurance, which set annual sales records since 2021, declined overall in 2025 despite strength later in the year. Supplemental health products, including accident, critical illness and hospital indemnity coverage, fell for three consecutive quarters after two years of growth, while disability insurance saw the biggest early-year weakness before partially stabilizing. LIMRA also published research through mid-2026 projecting muted growth for workplace benefits through 2028, citing rising health care costs that squeeze both employer budgets and workers' take-home pay. The report points to a shift from the prior peak of growth to a more normalized sales pattern. The scale of the reset is visible in 2024 premium totals and 2025 declines. In 2024, workplace life insurance new premium reached roughly $4.5 billion, disability new premium was about $4.2 billion, and supplemental health products added about $3.3 billion, for roughly $12 billion in new group ancillary premium. LIMRA data show 2025 started with declines, with first-quarter workplace life new premium down 16 percent year over year to $1.8 billion, disability down 15 percent to $1.6 billion, and supplemental health down 11 percent to $1.3 billion, before life insurance improved later in the year. 2025 full-year workplace life sales were about $4.4 billion, down 2 percent from 2024, but supplemental health did not see a similar rebound.