2026: The Industry Responds to an Aging Population
The past year was a growth year for U.S. life insurance sales, with momentum building each quarter. For annuities, the story was even bigger, with 2025 showing a continuing sales surge and annuity sales hitting quarterly and year-to-date records.
The new year promises to see a cooling off on the life side of the industry, while annuity sales will continue to show strength, according to LIMRA. One main factor influencing the industry: the aging of the U.S. population.
Consumer interest in life insurance has leveled off but remains higher than prepandemic levels, Bryan Hodgens, head of LIMRA research, told InsuranceNewsNet. “We saw a nice little bump up in life insurance sales during the pandemic that sort of sustained itself, but it’s flatlining a little bit at this point,” he said.
LIMRA predicts individual life insurance premium in 2026 to increase between 2% and 4% over the prior year. “Looking at that 2% to 4% growth, I think a couple of different factors will drive it,” Hodgens said. “I think we will see more of that growth in accumulation products, and we [will see] growth in the final expense market.”
LIMRA’s 2%-4% premium growth prediction “is pretty much in line with what we’ve been saying over the last several years,” he said. “It’s interesting that 2025 was a bit of an acceleration over that to the 2%-5% that we predicted for that year, which was a bit of an outlier.”
But that projected premium increase will not impact all product lines equally. Indexed and variable universal life could see a drop in sales, Hodgens predicted. “We’ve seen a lot of run-up in those product lines in 2025, and it really started late in 2024, [but] we’re not seeing as many bigger policies and larger premiums being written. I think that market, that opportunity, is sort of maturing. So I think we’re going to see a little bit of a pullback there.”
Economic factors will influence life insurance sales as consumers have many products and services competing for their dollars. “I think that when you look at the consumer and the demographic, you look at increased tightening of economic conditions — unemployment, high consumer prices and there’s still this pesky little thing called inflation sitting out there — I think that it impacts the disposable income that’s available for life insurance, and it’s competing against other investment products. I think this will continue to play out in 2026.”
An aging population also will influence life insurance sales in 2026, Hodgens said. LIMRA recently conducted a study with Capgemini on worldwide demographics, in which LIMRA surveyed the under-40 consumer.
“The reality is that whether it’s in the U.S. or outside the U.S., we have an aging population,” Hodgens said. “We have fewer people coming in behind it. Birth rates are down. People are delaying some of their life events — things that typically have been triggers for life insurance purchases — such as getting married, having kids, buying a home. All of those traditional triggers for life insurance purchases are getting delayed and happening less frequently.”
While the younger generations don’t appear to be quite ready to buy life insurance yet, the over-60 population has become a saturated market, he said. “We’ve sold this group a lot of life insurance over time, and we’ve tapped out that market to a certain degree. How much more growth will we get out of that?”
That leaves Generation X, generally referred to as people born between 1965 and 1980. The older members of this age group are hitting age 60, while the youngest are in their mid-40s. This group is looking at a looming retirement as well as financial obligations to both children and aging parents and is a prime market for annuity products.
LIMRA is working with the Alliance for Lifetime Income and will focus some of its research on Gen X in 2026, Hodgens said. “For annuities, Gen X is right in the sweet spot,” he said. “We know that the average age for purchasing an annuity is around age 64. The U.S. is in Peak 65 right now and Gen X is approaching retirement age, so we see Gen X as a good market for annuities.”