Life Insurance Sales Hit a Record $17.5 Billion. The People Who Need It Most Still Aren't Buying.

American consumers paid more in new individual life insurance premiums in 2025 than in any year on record. New annualized premium topped $17.5 billion, up 10% from 2024, according to LIMRA's full-year individual life insurance sales survey. The number of policies sold rose 7%.

But even as sales climbed, the coverage shortfall stayed near record levels. Among private-sector workers in the lowest wage decile, only 17% have access to employer-sponsored life insurance, the Bureau of Labor Statistics found in its March 2025 National Compensation Survey. Women were 11 percentage points less likely to own a policy than men in 2024, the widest difference in 14 years of tracking.

Industry-wide new annualized life insurance premium reached $17.5 billion in 2025, LIMRA reported in March 2026. That marks the fourth record in five years and a 10% increase over 2024. LIMRA's survey, which represents 85% of the U.S. life insurance market, covers all major individual policy types, making it one of the broadest measures of individual sales activity available.

Indexed universal life insurance (IUL) posted the strongest gains. IUL premium totaled a record $4.5 billion in 2025, up 17% from 2024, or 25% of the total U.S. life insurance market. Variable universal life (VUL) also rose 17% to $2.6 billion, holding 15% of the market.

Whole life premium climbed 7% to $6.4 billion, setting its own product-level record at 37% of the market. Term life grew 3% to $3.1 billion, or 17% of total sales. The one major product that declined, fixed universal life, fell 4% to $984 million.

Sean Grindall, LIMRA's senior vice president and chief member relations and solutions officer, said indexed and variable universal life products posted double-digit premium growth in what he described as a strong year for individual life insurance. Grindall also pointed to a longer-term challenge: meeting the rising need of middle-income and mass-affluent consumers.

The products with the biggest gains show where 2025 premium growth concentrated. IUL and VUL are cash-value products tied to market performance. Term life, the lower-cost income-replacement product, grew just 3%. Cash-value products usually cost more than term life and require more financial flexibility to buy and hold.

The American Council of Life Insurers (ACLI) 2025 Life Insurers Fact Book shows the scale of the underlying market. Americans purchased $2 trillion in new individual life insurance coverage in 2024. The average new individual policy face amount was $209,000, up from $168,000 in 2014. Term policies made up 39.3% of new individual policies by count but accounted for 72.1% of total face amount purchased. Families buy large coverage amounts for income replacement.

Sales records haven't closed the coverage shortfall. A record 42% of American adults, or 102 million people who either had no coverage or not enough, said in 2024 that they need life insurance or need more of it, according to the 2024 Insurance Barometer Study from LIMRA and Life Happens. That was the highest share in 14 years of the annual survey. In 2025, the share improved to about 40%, or roughly 100 million adults still reporting a shortfall.

Life insurance ownership has held at about 51% of adults since 2021, per LIMRA, down from 63% in 2011. The number of uninsured or underinsured Americans has stayed near record levels even as the market has grown. The ACLI 2025 Life Insurers Fact Book, drawing on Federal Reserve data, found that 56% of U.S. households held any life insurance in 2022, with a median face value of $150,000. MoneyGeek's life insurance statistics page tracks annual ownership data from LIMRA, and the 2025 Insurance Barometer Study found that 40% of adults say their loved ones would be barely or not at all financially secure if a primary wage earner died unexpectedly.

Middle-income households show the clearest distance between need and action. Those earning $50,000 to $149,999 are more likely to own life insurance (55%) than lower-income households, but 50 million middle-income adults still acknowledge a coverage shortfall, per the 2024 Insurance Barometer Study. John Carroll, LIMRA's senior vice president and head of Life & Annuities, said these households often don't know what or how much life insurance to buy, or what it costs, leaving many stuck in indecision.

Lower-income households show the largest ownership shortfall. Among households earning under $50,000, just 31% report owning life insurance, compared with 71% of households earning $150,000 or more, per the 2024 Insurance Barometer Study. That 40-percentage-point difference doesn't mean lower-income households need less coverage. It points to cost perception and access as major barriers.

For most American workers, the workplace is the primary path to life insurance. About 55% of working adults get some or all of their coverage through an employer, per LIMRA. But who gets that path depends heavily on what they earn.

The Bureau of Labor Statistics' March 2025 National Compensation Survey found that 62% of all civilian workers have access to employer-sponsored life insurance. That share falls steeply at the bottom of the wage scale. Among private-sector workers in the lowest wage decile, only 17% have access. Workers in the lowest wage quartile are at 28%. At the top, 91% of private-sector workers in the highest wage decile have access to employer-provided coverage.

Part-time workers are the most underserved group: only 15% have access to employer life insurance in private industry, compared with 73% of full-time private-sector workers. In service occupations, one of the largest low-wage sectors, access in private industry is just 32%. Workers at small employers with fewer than 50 employees have access at 39%; their peers at companies with 500 or more workers reach 87%.

The workers most dependent on group coverage to close their own shortfall are least likely to have it available at work. State and local government workers are an exception, with 84% having employer access, while private-industry access is far more limited for lower-wage workers.

Women are less likely to own life insurance than men, and that difference hit its widest point in 14 years in 2024. The annual Insurance Barometer Study from LIMRA and Life Happens found that 57% of men reported owning life insurance compared with 46% of women, an 11-percentage-point difference. In 2025, ownership was 54% for men versus 48% for women. The difference narrowed to 6 points but has not closed.

Women don't lack awareness of their need. In 2024, 45% of women, about 56 million people, reported a coverage shortfall, per the Insurance Barometer Study. Nearly four in 10 said they planned to buy a policy in 2024. But half of the women surveyed named cost as the reason they hadn't, and only 21% of women described themselves as knowledgeable about life insurance.

A single-earner household with dependent children has a clear income-replacement need. Term life coverage is designed for this: a fixed payout to replace lost income for a set number of years. By 2025, 43% of women, about 52 million people, said they need life insurance or need more of it, per the Insurance Barometer Study.

Women make up nearly half of the U.S. labor force, per BLS labor force data, yet have consistently owned life insurance at lower rates than men across 14 years of Insurance Barometer tracking.

Cost misjudgment is the most persistent barrier to coverage. About 72% of Americans overestimate the cost of a basic term life insurance policy, the 2024 Insurance Barometer Study found. Adults ages 18 to 30 overestimate that cost by 10 to 12 times, LIMRA found in 2025. More than half of survey respondents (54%) said their cost estimate came from gut instinct or a wild guess.

For a 30-year-old nonsmoker in average health, $500,000 in 20-year term coverage runs about $24 to $43 per month, per MoneyGeek's rate analysis. Whole life coverage costs far more: a 40-year-old pays about $303 to $337 per month for $500,000 in permanent coverage. Consumers who overestimate term pricing often conflate it with these permanent-policy costs.

Cost concerns compound the income divide. Households already stretched on monthly cash flow may be ruling out coverage based on a price they've never actually looked up. LIMRA's data show that among middle-income consumers, 54% expressed intent to buy life insurance. But intent doesn't convert without accurate information about what coverage actually costs.

Insurers have tried to reach these buyers through final expense and smaller-face-amount whole life products. Karen Terry, LIMRA's corporate vice president and head of Insurance Research, said in early 2026 that several carriers expanded their final expense and smaller-face-amount business in 2025 “to attract more middle-market consumers.” Those products serve a different need than income-replacement term coverage. They also signal that carriers see the access shortfall as a segment worth reaching.

The 2025 Insurance Barometer Study found that 47% of Americans say their loved ones would have trouble paying living expenses within six months if a primary wage earner died unexpectedly. A life insurance calculator can turn that risk into a specific coverage amount and price instead of guesswork.

LIMRA projects that 2026 will bring more measured sales growth as economic conditions soften. IUL is forecast to continue double-digit gains while term life stays relatively flat. Without structural changes in how coverage reaches lower-wage and part-time workers, the coverage shortfall is unlikely to narrow as the market sets new records.

MoneyGeek's guide to how life insurance works walks through policy types and helps readers get a real quote based on age and health.

The best life insurance companies offer term policies at prices well below what most consumers estimate before looking. That distance between assumed cost and actual cost helps explain why LIMRA counts roughly 100 million uninsured or underinsured adults in recent Insurance Barometer data.