What's Happening?
The MIB Life Index has reported a significant increase in life insurance application activity, marking a record growth in 2025. The application activity rose by 22% in December, contributing to the highest
total volume of annual application activity seen in the last decade. Throughout 2025, the growth was consistent, with the first quarter seeing nearly 1% growth, the second quarter 3%, and the second half of the year experiencing a surge with 9% growth in the third quarter and over 15% in the final quarter. All age bands saw year-over-year growth, with ages 61 and above achieving double-digit growth. Term life insurance was a major contributor to this growth, accounting for over 52% of total application volume and showing a 17.5% increase over 2024.
Why It's Important?
The record growth in life insurance applications in 2025 indicates a strong demand for life insurance products, driven by various factors including economic uncertainty and demographic shifts. This growth reflects consumers' increasing awareness and need for financial security amidst inflation and potential economic instability. The rise in applications, particularly for term life insurance, suggests that more individuals are seeking affordable and straightforward coverage options. The involvement of private equity in the life insurance industry is expected to continue supporting innovation and product development, enhancing long-term growth capacity. Additionally, advancements in AI are anticipated to improve underwriting and customer service, further driving industry expansion.
What's Next?
Looking ahead, the life insurance industry is expected to continue growing, albeit at a moderated pace due to economic concerns. LIMRA forecasts a growth in new annualized premiums between 2% and 6% in 2026, slightly above historical averages but below the surge seen in 2025. The industry will likely see increased investment from private equity, supporting innovation and product development. AI-driven improvements in underwriting and customer service are expected to enhance operational efficiency and customer experience. Furthermore, the rising interest in long-term care solutions and hybrid insurance products, particularly among millennials, is likely to broaden the market and attract younger demographics.
Beyond the Headlines
The growth in life insurance applications highlights broader trends in consumer behavior and financial planning. As healthcare costs rise, there is a growing interest in life insurance products that offer long-term care benefits or other living benefits. This shift towards combo products reflects a changing landscape where consumers are seeking comprehensive solutions that address multiple financial needs. The integration of digital experiences and streamlined processes is encouraging more financial professionals to incorporate life insurance into their planning conversations, potentially leading to increased advisor engagement and channel expansion.
