US individual life insurance new annualised premium exceeded $17.5 billion in 2025, up 10% year over year, according to LIMRA’s industry sales survey — a record, and the fourth in five years.
Growth was led by indexed products, which is the part worth slowing down on.
Why Sales Keep Setting Records
Three things are running at once.
Rates. Higher interest rates make the guarantees inside permanent life insurance and annuities cheaper for insurers to fund, which shows up as better illustrated values and more competitive pricing. The products got more attractive because the yield environment allowed it.
Demographics. The largest cohort of Americans ever to approach retirement is doing so now, and life insurance sales cluster around estate and income-replacement planning at exactly that stage.
Distribution. Simplified-issue and accelerated-underwriting products have removed the medical exam from a large share of the market. A policy you can buy in twenty minutes online sells to people who would never have completed a paramedical exam.
The Indexed Product Question
Indexed universal life and its annuity cousins credit interest based on the movement of a market index, subject to a cap on the upside and a floor — usually 0% — on the downside.
The pitch is straightforward and appealing: market participation without market losses.
What buyers routinely miss:
- The cap is not fixed. Insurers can and do lower participation rates and caps after issue. Illustrations run at today’s cap, and nothing guarantees today’s cap.
- Dividends are excluded. Index crediting is almost always on price return, not total return. Over long periods that omission is substantial.
- Cost of insurance rises with age. In a universal life chassis, internal charges increase as you get older. If the crediting underperforms the illustration, the policy can require far higher premiums later — or lapse.
- Surrender charges run long. Ten to fifteen years is common. The money is not liquid in the way the illustration’s cash value column suggests.
None of this makes indexed products wrong. It makes them a planning tool with real complexity, sold in a market where the illustration does most of the persuading.
What Most People Actually Need
For the large majority of households, the honest answer has not changed: term life insurance, sized to the obligation and lasting as long as the obligation does.
- How much: enough to clear the mortgage, replace income for the years your dependants need it, and cover education if that applies. Ten to twelve times income is a starting heuristic, not an answer.
- How long: to the point where the mortgage is gone and the children are independent. A 20- or 30-year level term usually maps to that.
- What it costs: a fraction of permanent coverage for the same death benefit. That difference, invested, is the comparison any permanent policy has to beat.
Permanent insurance earns its place in specific situations — estate liquidity, a special-needs dependant, a business buy-sell agreement, a genuinely maxed-out tax-advantaged position. It is a poor default.
Before You Buy Anything
- Get quotes from at least three carriers. Underwriting classification varies more between insurers than pricing does, and one carrier’s “standard” can be another’s “preferred” for the same health history.
- Answer the health questions accurately. A misstatement inside the two-year contestability period can void the policy at exactly the moment it is needed.
- If you are shown an indexed illustration, ask for it re-run at the guaranteed minimum, not the illustrated rate. The difference between those two columns is the actual risk you are taking.
- Name and update your beneficiaries. A stale beneficiary designation overrides your will.
Compare term and permanent carriers in our life insurance guide.