Life insurance sales continue to increase, with no sign of stopping. How can you use these recent sales stats to grow your business?
2023 was another record-setting year for new annualized life insurance premium. Last year's new premiums topped the previous year's total by 1%, to the tune of $15.6 billion. Policy count also increased 4% over 2022. The best news? It was the third record-breaking year in a row – and LIMRA predicts continued growth, as we’ll see below.
Life Insurance Sales in 2023
- 6 in 10 companies, including 5 of the top 10 carriers, reported growth in new annual premiums in the second half of 2023.
- The number of policies sold increased 4% in 2023. In Q4 alone, the number of policies sold increased 2%, thanks to strong term life sales.
- In Q4 alone, total life insurance premium rose 4% over 2022’s sales, to a total of $4.2 billion.
- Every product type shown below charted positive growth in Q4 2023.
Sales by Product Types
Which products had the most market share in 2023? Here’s a look at market share by premium, as calculated by LIMRA.
39%: Whole life
24%: Indexed universal life
19%: Term life
12%: Variable universal life
6%: Fixed universal life
100% total
Let's take a closer look at those percentages and what they reveal.
39%: Whole life
Growth was minimal in 2023, with a 1% increase in annualized premium and 2% growth in number of policies sold. Both stats showed a downtrend in Q4 (-1% and -3%, respectively). Despite limited growth, LIMRA predicts that whole life sales will grow as inflation continues to fall – they predict growth up to 5% annually through 2024.
24%: Indexed universal life
Growth was mixed in 2023, with a huge increase in the number of policies (19%) but a 4% decrease in annualized premium. Q4 was positive for both stats, with 3% growth in annualized premium and a 12% increase in number of policies. Those numbers indicate that customers like the opportunities IUL presents, but aren’t always willing to purchase a higher face value.
19%: Term life
In January 2023, 52% of consumers reported owning life insurance, up from 50% in 2022 but down from 63% in 2011.
Growth was strong in 2023, with a 5% increase in annualized premium and 3% growth in number of policies sold. Every quarter saw growth in both stats, with a big boost in Q4 (6% and 4%, respectively). What does this tell us? Affordable term policies are still popular, but people are willing to spend more to get a higher face value. This may reflect multiple economic factors, including inflation and the increased price of housing.
12%: Variable universal life
Growth was also mixed in 2023, with 8% growth in annualized premium over 2022, but overall, the number of policies sold slipped a little (-1%). Q4 was a huge boost, however; annualized premium went up 11% and the number of policies sold increased 9%.
6%: Fixed universal life
Growth decreased in 2023 compared to 2022, with annualized premium (-3%) and number of policies sold (-6%) slipping. However, there was a bright spot in Q4, with a 9% increase in premium. These declining numbers tell us customers like the idea of flexible coverage, but are choosing options that also have room for upside growth and downside protection, like IUL and VUL.
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What It Means for You
These increased sales give you several new marketing angles:
1. Market your time as a scarce commodity.
Tell clients and prospects sales are up – you have these stats from LIMRA to prove it. And if sales are up, you have more demands on your time. If you have a prospect wavering and you’re trying to get them to set a time to talk, remind them you’re getting booked up quickly. If you have one last slot available this week, are they interested?
2. Market life insurance as an “everybody’s doing it” solution.
38% of Americans say their household would face financial hardship within 6 months should a wage earner die unexpectedly — 30% would struggle financially within a month.
Since the pandemic, life insurance sales have been on the rise. If it were a fad, sales would have cooled in 2022 and beyond, as life returned to normal.
But sales have continued to rise. That means people are taking the lessons learned from the pandemic and the steep rise in inflation. Now more than ever, we know how vulnerable we are and people are taking action.
Make sure your prospects know they’re not alone. More people every year since 2020 have made the decision to protect their loved ones. If they want to be among those that have financial peace of mind for their family, now is the time to act.
3. Market life insurance as a product your clients can – and should - update.
Both of the previous strategies apply more to prospects than clients. But let's think about why life insurance sales have surged lately. The pandemic is part of the answer, of course. But it’s also about what the pandemic forced carriers to do: namely, offer more non-med non-contact purchasing options. And it's also about the interest rate hikes that followed. For clients with whole life policies or an annuity with a guaranteed rate, are there better options on the market now?
It's worth checking in to ask clients who bought a policy before 2020 a few questions. Do they have enough coverage? Do they have the expanded protection riders can offer? If they have permanent coverage, are they locked in with today’s high interest rates? A new policy could offer them more benefits, more cash value (for policies with a guaranteed interest rate), and more ways to apply without taking a medical exam. Make it as easy and appealing as possible by adding benefits and removing objections.
That’s our quick look at how to use recent sales stats to market to prospects and clients!
What trends in life sales have you noticed recently? Tell us in the comments!
