U.S. Life Insurance Premiums Rise 8% in Q1 2025 with Product Segment Shifts
The U.S. life insurance market saw growth in individual life insurance new annualized premium during the first quarter of 2025, increasing 8% year over year to $3.94 billion, according to LIMRA's U.S. Life Insurance Sales Survey. The survey represents 80% of the U.S. life insurance market and also reported a 1% increase in the total number of policies sold. Notably, Pacific Life surged 38% in new premium, overtaking the top spot in premium sales, while Nationwide and Prudential also posted significant gains of 47% and 25% respectively. In contrast, Northwestern Mutual, a previous leader, experienced a 4% decline, dropping to second place in the quarter.
Market dynamics suggest that economic factors such as persistent inflation and higher equity market volatility have driven consumer interest toward permanent life insurance products, including indexed universal life (IUL) and variable universal life (VUL) insurance. IUL premiums increased 11% to $959 million and accounted for 24% of the overall new annualized premium, with many carriers reporting strong sales driven by demand for high face amount policies and expanding middle-market presence. VUL premiums surged 41% to $533 million, representing 14% of the market, with multiple carriers achieving double- or triple-digit growth.
Whole life insurance maintained steady performance, with new premiums totaling $1.48 billion and a modest 2% increase in policy count, primarily driven by growth in final expense and small policy sales. This product segment comprised 37% of the new annualized premium market share. Conversely, term life insurance experienced a slight decline of 1% in new premium to $738 million and a 2% decrease in policy count. This decline aligns with the economic challenges faced by the target demographic for term products, often middle-income and younger adults.
Fixed universal life insurance showed a 4% drop in new premium to $235 million, recording the lowest quarterly premium collection since Q3 2023. Policy sales fell 13%, influenced by decreased sales in current assumption and lifetime guarantee products despite growth in accumulation-focused and fixed hybrid life/long-term care products.
LIMRA projects that ongoing capital availability through private equity and reinsurance, along with technological advancements and product innovation, will support continued life insurance industry growth through 2025. Market participants are advised to monitor economic conditions and consumer preferences as indicators that influence life insurance purchasing behavior, particularly for product categories sensitive to inflation and economic uncertainty.