Will life insurance sales settle down after rollercoaster ride?

After a rollercoaster ride of pandemic impacts and regulatory changes, the individual life insurance market is poised to return to a more normal growth pattern over the next few years.

Attendees at the Life and Annuity Conference, sponsored by LIMRA, LOMA, SOA and ACLI, heard some insights on what the next few years should bring after life sales were hit with the effects of COVID-19 and changes in the life insurance marketplace.

“We've had quite a rollercoaster ride in the last few years since the pandemic in terms of sales, that’s for sure,” said Karen Terry, who leads LIMRA’s individual products research team. “What we are seeing now is that sales are finally starting to settle back down from all of those pandemic impacts, regulatory impacts, economic impacts.”

Terry said LIMRA expects life insurance sales to return to more normal levels.

“Life insurance sales generally tend to increase about 3% per year in terms of premium – outside of any major impacts that can cause increases or decreases,” she said. “We’re expecting the market to do that next year and kind of return to more steady growth.”

She attributed the calmdown to “not seeing a lot of regulatory changes that will cause drastic shifts in product sales and not seeing any changes in the economic factors from where they are now.”

Terry said that although the number of life insurance policies sold had been on the downward trend prior to 2020, policy sales have been up over the past three years and premium is up as well.

“In terms of consumer interest in life insurance, we see that has increased since 2020 and we expect to see that remain higher than it was before the pandemic,” she said.

As the pandemic moves into the public’s rear-view mirror, consumer demand for life insurance will slide, Terry predicted.

“I think historically, when we look back at other pandemics and other issues like this, they have increased people’s awareness of their own mortality,” she said. “The further you get away from it, people’s priorities shift and people stop paying attention. The event doesn’t have quite so much of an impact anymore. So we expect interest in life insurance to decline but hopefully not decline back to where it was before the pandemic.”

Terry pointed to new products such as simplified issue and instant issue that are gaining headway in the marketplace.

“We’re hoping these will help expand the base in terms of customers who are able to purchase life insurance by making it easier for them to do so.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on X @INNsusan.

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