Life Insurance Sales Post Dramatic Gains Not Seen in Nearly Four Decades

Life insurance policy sales in the U.S. have hit a record-busting pace, logging the highest quarterly growth since 1983, according to the industry research group LIMRA. Sales rose 11% in the first quarter of 2021, compared to the same period in 2020, and new premium growth also saw a double-digit boost, up 15% from a year ago.

What's Driving the Trend?

Unlike in 1983, when double-digit policy count growth was driven by universal life insurance replacement, this year's policy sales represent organic growth, says David Levenson, president and CEO, LL Global, LIMRA and LOMA. 

As with many financial trends in the past year, COVID-19 had a major impact. More people recognized the need for life insurance, Levenson says, and companies also took steps during the pandemic to make it simpler for people to buy coverage.

The latest results follow LIMRA's 2021 Insurance Barometer Study, which noted a spike in people's intentions to buy life insurance. More than a third of consumers (36%) in that study said they planned to buy coverage within the next 12 months—the highest purchase intent in the annual survey's history.

Whole Life and Term Led the Way

Whole life and term life led the significant first-quarter growth, making up 88% of policies sold. Policy counts in the first quarter rose 6% for universal life, while variable universal life jumped 31%, compared with first quarter 2020 results.

Seven in 10 life insurers—including nine of the top 10—reported increases in new annualized premiums in the first three months of 2021. Six in 10 issued more policies in the first quarter, and eight of the top 10 carriers recorded double-digit growth in policy sales. LIMRA's data represents about 80% of the U.S. individual life insurance market.

According to additional details provided by LIMRA, here are the nation's top 10 life insurance carriers based on policy sales in Q1 2021 (listed alphabetically; LIMRA does not disclose specific sales rankings):

• Colonial Penn
• CUNA Mutual
• Gerber Life Insurance Company
• Mutual of Omaha Companies
• New York Life
• Northwestern Mutual
• Primerica Life Insurance
• State Farm Life
• Transamerica
• Unum

Will the Boom Continue?

Can the life insurance industry sustain the current high-growth pace? While intent to buy doesn’t always produce a sale, Levenson’s forecast is bullish.

"We expect this growth to continue through 2021 based on both life insurance applications—perhaps the best leading indicator of future sales—and increased consumer demand that history tells us will likely persist for at least several years following the pandemic," he told Investopedia.

How Much Life Insurance Is Enough?

How much life insurance to buy is a common question for consumers trying to balance their family's needs with the cost of a policy.

For a ballpark estimate, the industry-supported nonprofit LifeHappens.org advises adding up the current and future expenses your family is likely to face if you were to die—including mortgage payments and college tuition. Then, tally any income or other financial resources they’ll continue to receive or be able to tap. The difference between these two numbers is the amount of life insurance to consider, as a way to fill any gap.

You can get a general idea of the amount of life insurance that might make sense for you and your family by using LifeHappens.org’s life insurance needs calculator.

As to the right type of life insurance for you, and other considerations, Investopedia has this Life Insurance Guide to Policies & Companies.