In 2023, the total new annualized premium for US life insurance saw a modest increase of 1% from the previous year, reaching a record $15.6 billion, according to preliminary findings from the Life Insurance Marketing and Research Association’s (LIMRA) US Life Insurance Sales Survey.
The association noted that this marks the third consecutive year of record-setting growth in new annualized premium.
The fourth quarter of 2023 alone witnessed a 4% increase in total life insurance premium to $4.2 billion, with policy sales up by 2%, largely fueled by term life insurance’s strong performance.
Breaking down the categories, whole life insurance’s new premium remained stable at $1.6 billion in the fourth quarter, with a slight 1% increase to $6.1 billion for the year, making it the largest market slice at 39%.
LIMRA anticipates a positive outlook for whole life sales, projecting up to 5% annual growth in 2024 and 2025.
Term life insurance also saw growth, with an 8% increase in new premium in the fourth quarter to $756 million and a 6% rise in policy count. For the entire year, term life premium rose to nearly $3 billion, a 5% increase from 2022, representing 19% of the market share.
Indexed universal life (IUL) insurance reported a 3% increase in premium to $1.05 billion in the fourth quarter, with a 12% increase in policy count. However, IUL’s new premium for the year fell by 5% to $3.7 billion, despite a 20% rise in policy sales, accounting for 24% of the total US premium.
Variable universal life (VUL) insurance also experienced growth, with an 8% increase in new premium to $524 million in the fourth quarter and an 8% rise to $1.9 billion for the year, maintaining a 12% market share.
Fixed universal life (UL) insurance saw a 9% increase in new premium in the fourth quarter to $267 million, although the annual premium fell by 3% to $977 million, with a 6% market share.
John Carroll, senior vice president and head of life & annuities at LIMRA and LOMA, noted the industry’s robust growth in the post-pandemic era, with significant sales increases reported by a majority of companies, including half of the top 10 carriers.
“We are also seeing a strong uptick in the number of policies sold. In 2023, policy count increased 4%,” Carroll said. “Our consumer sentiment data suggests that more people started feeling more confident in the economy and their own financial outlook in 2024. This may have prompted consumers to address their life insurance needs.”
Elsewhere in the sector, a Senate report delved into the trend of the wealthiest Americans using high-end life insurance plans to dodge billions of dollars in taxes.
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