Recent global pandemic notwithstanding, group life insurance pricing is traditionally guided by relatively predictable demographic patterns and mortality trends. In recent years, however, shifting medical, demographic and societal forces are adding complexity for insurers, benefits advisors and employers.
“Today’s rapidly changing environment requires more sophisticated modeling,” says Kyle Strese, Vice President of Group National Account Underwriting at Securian Financial. “Because group life insurance looks at a three to five-year horizon to determine pricing, insurers are taking a more interconnected approach to evaluating mortality risk across actuarial, medical and predictive analytics.”
Three specific trends are transforming how group life coverage is underwritten: the aging U.S. workforce, the rise of GLP-1 medications and evolving overdose mortality patterns. For benefits consultants, understanding these developments can reshape the way they approach their clients about underwriting and plan recommendations.
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Trend 1: An aging workforce creates new pricing pressures
More Americans will turn 65 between 2024 and 2027 than ever before, creating a demographic wave known as “Peak 65.” As Baby Boomers remain on the job longer and Gen Z delays entry into the traditional workforce, employers are experiencing a double shift that raises their average employee age.
“This shift affects companies across all sizes and industries, and it’s something we've never seen before,” Strese says. “Every year a plan gets older, the impact on mortality is about 10% for flat-rate group life insurance. So, if a group’s average age rises even slightly, that can translate to a 20% to 30% impact on pricing.”
What brokers should consider: Evaluate how age is distributed across the employee population – and how that’s projected to shift. In some cases, moving to age-based rating structures can offer more rate predictability for clients as their workforce demographics change.
Trend 2: GLP-1s medications raise new considerations – and questions
The rapid adoption of GLP-1 medications like Ozempic and Wegovy is changing how obesity and chronic conditions are treated. As of 2024, 12% of U.S. adults report taking GLP-1s – a sharp increase from an estimated 3% in 2022.
Early studies suggest the medications help reduce risks associated with obesity, including cardiovascular disease, type 2 diabetes and certain cancers, which could affect mortality rates.
“There’s cautious optimism about the potential impact of GLP-1s, but it’s currently a neutral factor for group life pricing,” Strese explains. “The industry is taking a wait-and-see approach as questions remain around long-term adherence, unequal access, costs and long-term side effects.”
What brokers should consider: As employers consider whether to cover GLP-1 medications, brokers can help evaluate implications beyond health insurance costs. Collaboration between health and non-medical benefits teams can uncover ripple effects on other benefits, like disability or life insurance.
Trend 3: Encouraging overdose trends emerge
After more than a decade of increases, U.S. overdose deaths declined by 24% from October 2023 to September 2024. While the trend is encouraging, insurers remain cautious, waiting to see whether the decline is sustained and how it may affect the insured workforce.
“Overdose and suicide are two of the leading causes of death for employees under 45, so even if they’re not the largest driver in a company’s claims data, they’re often the ones employers want to talk about,” Strese says.
What brokers should consider: Be ready to contextualize cause-of-death data for clients. These conversations can help employers understand population risk and explore opportunities to support well-being across benefits.
Together, the aging workforce, increasing GLP-1 utilization and declining overdose rates are reshaping how insurers assess group life risk – and giving benefits advisors fresh opportunities to guide plan decisions.
Ann Clifford is a freelance writer who translates her background in financial services marketing into specialized content focused on employee benefits and small business topics.
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