What will 2026 bring to the life/annuity markets?

Last year proved to be a strong year in both the individual life and annuity markets – through Q3 2025, individual life premium was up 13% year over year, while policy counts were up 10%.

Source: LIMRA

In an industry accustomed to 1%-3% annual growth, the significant growth in premium and policies seen in 2025 reflect an active life insurance market.

Annuities have seen eight consecutive quarters of sales over $100 billion, with total sales of $345 billion through Q3 2025 - up by 4% YoY.

Source: LIMRA

Annuity sales are poised to pass 2024’s record-breaking year, providing strong momentum headed into 2026. Looking forward, here are some key trends and questions facing the life and annuity markets.

1. Can life carriers sustain 2025’s significant growth?

There has historically been a gap in life insurance coverage, driven in part by perceived unaffordability, delays in traditional life events (e.g., marriage, home purchases, birth of children) and overall marketing challenges. Last year saw the industry overcome these challenges.

Life carriers should expect growth to continue in 2026, although not all carriers will share evenly in the profits. IUL and VL should continue to see significant growth, as participants seek to have greater equity exposure. A lower interest rate environment may impact whole life sales but expect a long-term uptick in burial policies as an aging population prepares for final expenses.

2. Will annuity sales continue to break records?

The demand for accumulation and decumulation products should continue to drive overall annuity sales to new records in 2026, but overall growth will likely decelerate. With a lower interest rate environment, expect some fixed annuity owners to exchange their policies for other types of annuity products. FIA sales will continue to be strong but will likely see lower or possibly flat growth. Instead, the annuity market should prepare for significant growth in the RILA market, as consumers seek to get greater market participation with downside protection.

3. What role will product innovation play in driving sales?

While life and annuity carriers should be bullish on growth prospects, the key differentiator will be how carriers differentiate their products in the market. A preliminary view provides three ways that carriers can address needs in the market.

The first is in the RILA market – expanded distribution and product offerings will likely drive sales in the space, with new entrants providing new product features. The second is in hybrid products – both the life and annuity space can provide bundled or multifaceted products that can provide additional benefits to the policyholder. Long-term care hybrids are one option, but other material living benefits (e.g., trusts and wills) may solve unique customer needs and drive sales. The third are distribution channel-specific products. Designing products and experiences for individual sales channels (e.g., fee-based products for the registered investment advisory channel) provides carriers with significant growth opportunities.

4. What technology investments will carriers make in 2026?

In 2026, carriers should continue to invest in data and technology capabilities to improve processes and their ability to serve agents and policyholders.

Here are two things to watch for in the industry. The first is evidence of capability gaps between leaders and followers – those who have delayed modernization efforts will begin to see the gap between them and leading carriers grow (e.g., new business cycle times). The second is how carriers will leverage technology to expand distribution capabilities, particularly as a differentiator in third-party distribution.

5. What will happen with artificial intelligence in 2026?

No 2026 trend list would be complete without a reference to AI. Most carriers are still in the transition phase from dabbling in AI to leveraging AI to significantly impact the way they do business. Expect carriers to focus on specific AI use cases that can eventually be scaled to other parts of the business. This includes sales and distribution, underwriting, and policy administration and servicing.

This is poised to be an exciting year for the life and annuity market – both for growth and innovation.

© Entire contents copyright 2026 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

Chris Taylor is an established leader in the insurance industry with more than a decade of experience supporting insurance strategy and performance improvement outcomes. Contact him at [email protected].