Hybrids will lead the way in product trends for 2026

Industry experts believe both a shift in the average American consumer’s behavior and technological advancements will drive innovation in life insurance and annuity products in 2026.

While LIMRA maintains that more mainstream products such as registered index-linked annuities and indexed universal life will continue to see growth and innovation in the months ahead, industry leaders who spoke with InsuranceNewsNet unanimously agreed there will be a strong focus on new hybrid products.

“You’re looking at products that are hybrid in nature, that cover ailments or disabilities or long-term care, et cetera, during the lifetime of the policy,” Samantha Chow, vice president and global head of life, annuity and benefits at Capgemini, said. “We tend to refer to those as living benefits — not to be confused with living benefit riders that have existed for eons in the industry but more specifically to the benefits that can be used during someone’s lifetime.”

Chow said the insurance industry had “seen a little bit” of this in the last quarter of 2025, but she believes it will gain more traction in the year ahead. And in her view, the catalyst is that the demands, needs and desires of American consumers both young and old have changed. 

“We’ve been talking about it here at Capgemini for the last couple of years, how the perspective of the next generation of buyers has changed. Even those who are buying today above that 40 age rank are still looking at life insurance very differently outside of tax savings and high net worth scenarios,” Chow said.

Ron Gura, co-founder and CEO of bereavement support provider Empathy, described this holistic approach to planning for life and loss as a “comprehensive” strategy carriers could adopt in 2026 and going forward.

“We do see a lot of hybrid products, but I think the title is more ‘comprehensive products.’ People are looking to make sure their offering is more cohesive. They’re shifting from talking about protection to financial advice — everyone is looking to make this more about holistic planning versus here’s a policy for this and here’s a policy for that,” Gura said.

He believes 2026 will see a continued shift in approach for life insurance to become an “ongoing care relationship” rather than purely transactional, and “continuity of care benefits” could even become table stakes over time.

Upcoming sales trends in life and annuities

On the more traditional side of life insurance, Karen Terry, corporate vice president and director of LIMRA Life Insurance Research, said carriers are expected to continue bringing simplified solutions and accumulation-oriented products throughout 2026.

LIMRA’s data shows new indexed UL premiums were up 16% year over year towards the end of 2025, while variable UL premiums were up by 35%. Meanwhile, new whole life insurance premiums were up 11% — “the biggest growth since at least 1990.”

“Indexed universal life will remain a priority, and final expense and simplified whole life will continue to expand,” Terry said. “IUL and variable universal life continue to dominate premium growth. Whole life remains relevant, with final expense products fueling record policy growth. Some carriers are also prioritizing simplified underwriting and accelerated issuing to improve accessibility.”

Meanwhile, Keith Golembiewski, assistant vice president and head of LIMRA Annuity Research, noted an expected focus on RILAs and innovation in the in-plan annuity space as carriers seek to further diversify their product mix with an “all-weather portfolio type of solution.”

LIMRA has already projected RILA sales will hit more than $75 billion for 2025 and that the trend will continue through 2028.

“LIMRA expects the industry will continue to see innovations around registered index-linked annuities,” Golembiewski said. “New crediting methods, indices and guaranteed living benefits will help drive activity.”

At the same time, he said LIMRA expects innovation on the advisory side via “more fee-based annuities and contingent deferred annuities” that allow clients to “maintain control of assets and how they are invested, while adding guaranteed income or protection.”

The era of hybrid

One of the biggest trends expected to come in 2026 is a significant rise in hybrid solutions as carriers race to launch product lines that meet new consumer needs.

For instance, Chow pointed to Guardian Life’s SafeGuard 360, which bundles whole life insurance with long-term care and disability coverage in one hybrid solution.

“There are a couple of examples out there where a whole life policy cash value accumulation can be used for loans and financial planning, but outside of just being a life insurance policy it is critical illness, disability, income and long-term care. It can be used for any of those scenarios,” Chow explained.

LIMRA also identified LTC as an “arena ripe for innovation” from both the life insurance and the annuities standpoints. Terry pointed out that this rising interest in hybrid products aligns with new consumer preferences for flexibility and financial security.

“We are seeing awareness of the need for long-term care funding solutions and interest in life/LTC combination products, especially among millennials and caregivers. Hybrid products are positioned as alternatives to stand-alone LTCi, and carriers are likely to expand these offerings given the growing need for long-term care services,” Terry said.

“Annuity/long-term care hybrid products have been on the minds of annuity carriers for many years, and 2026 could be the year that we see more products as insurance companies figure out the economics and risks associated with these products,” Golembiewski added.

In the annuities space particularly, Chow pointed out that hybrid solutions can address consumer fears about “putting money in something they might lose” or may not be able to access when they need to.

They want “that growth and ability to say, if it’s your annuity and you pass, then those funds would go to the next beneficiary or the next annuitant. Bandhan’s iRetire or AXA’s WealthAhead are other good examples of that,” she said.

Additionally, hybrid products are expected to play more of a role for working professionals, whether they receive benefits through their employer or individually.

Gura projected that “lines are blurring” between group and individual benefits and 2026 could see “more caregiving solutions shifting into life insurance, and specifically long-term care riders.”

“Voluntary products will become more common,” Chow suggested. “You’re also seeing more voluntary life insurance products coming in that are kind of variable universal life products that are portable. This is what I expect to see more of in 2026 and into 2027.”

Innovation driven by artificial intelligence

Chow also suggested continued advances in technology could open the door for flexible products that adapt as the policyholder’s life changes.

“I think it’s something that we might see some of in 2026 — more advanced in 2027 — just because it’s going to be complex. This is a life insurance policy that has other types of benefits, financial growth and investment growth built into it, but it changes as your life stage changes,” she said. 

She also expects AI to fuel digital engagement in life insurance and annuities, helping agents identify the right type of products for clients while also facilitating consumer education. 

Golembiewski believes — for annuities particularly — AI-driven innovation in the coming months could surpass what’s been seen in the last two decades. 

However, Chow noted that carriers still must tackle the tedious task of updating legacy systems and “technical debt” that has existed for decades and “prevents a lot of good use of AI.” 

“There will be a lot of cleanup, getting the data estate prepped and ready to use AI. We’re going to see a lot more of that, and that’s prep for a lot of these flexible products,” she said. 

Rayne Morgan is a journalist, copywriter, and editor with over 10 years' combined experience in digital content and print media. You can reach her at [email protected].