Term Life Insurance in 2025: What a Record-Breaking Year Means for Buyers

Why you can trust Insure.com

Quality Verified

At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry.

After years of record-setting growth across the life insurance market, term life insurance closed out 2025 with a quiet but steady performance.

Term life’s new annualized premium totaled $786 million in the fourth quarter of 2025, a 5% increase compared to the same period in 2024, according to preliminary results from LIMRA, an organization specializing in research, consulting and professional development for the insurance and financial services industries.

New annualized premium is the yearly income expected from new life insurance policies sold during a specific period, calculated as if all premiums are paid annually.

For the full year, term life new premiums reached $3.1 billion, up 3% YOY from 2024, with the number of policies sold growing 2%. While modest compared to the double-digit surges seen elsewhere in the market, term life insurance remained a cornerstone of American financial planning — accounting for 17% of total individual life insurance sales in 2025.

In other segments:

Whole life: New premiums climbed 7% for the year to a record $6.4 billion, representing 37% of the total market. Policy count grew 12% year over year, driven by strong final expense product sales.
Indexed universal life (IUL): Annual new premiums hit a record $4.5 billion, up 17% year over year, capturing 25% of the market. IUL also set a quarterly record in Q4, with $1.3 billion in new premiums.
Variable universal life: New premiums totaled $2.6 billion for the year, up 17%, YOY, representing 15% of the total U.S. individual life insurance market.
Fixed universal life: Premiums fell 4% YOY to $985 million, continuing a five-quarter decline, and held 6% of the market.

What’s behind term life’s steady — if slower — growth?

Term life’s 3% annual growth stands in stark contrast to the record-breaking pace set by accumulation-focused products in 2025, but that contrast tells an important story about what makes term life unique.

Karen R. Terry, corporate vice president and director of LIMRA Insurance Research, says that’s less a sign of weakness than a reflection of what term life is built to do.

“Term life is the simplest product that doesn’t have a cash value component that grows over time. While other products may see swings in popularity due to changes in economic and market conditions, term life is a steady, dependable product that meets basic needs for a large group of consumers,” Terry says.

For people shopping for term life, that stability works in their favor. As carriers compete for business, many have invested in faster, simpler ways to apply — think online applications and automated approvals — making it less of a hassle to get covered than it used to be.

Why are more Americans buying life insurance overall?

The record $17.5 billion in total new annualized premium in 2025 — marking the fourth record year in the past five — didn’t happen by accident. Terry points to a combination of lasting behavioral shifts and industry innovation.

“COVID-19 raised consumer awareness about the importance of having life insurance and elevated sales,” she says. “As we saw in the 1918 flu pandemic — which saw increased sales for years after — the increased awareness and interest in life insurance post-COVID-19 remains.”

Technology has played an equally important role. Advances in underwriting automation, digital applications, marketing and lead generation have made the buying process faster and more accessible than ever, expanding distribution reach and reducing friction for both consumers and financial professionals.

Easing inflation also helped open the door for more buyers.

“Inflation slowed last year, easing pressure on consumer finances, particularly with younger generations,” Terry says. “According to the 2025 Barometer, Gen X consumers are more concerned with financial issues than younger generations for the first time in recent years.”

This shift suggests younger buyers may have more financial breathing room to invest in coverage.

Life insurance shopping outlook for 2026

LIMRA is forecasting overall life insurance new annualized premium growth of 2% to 6% in 2026 — slightly above the historical average of 3.1%, but well below 2025’s double-digit surge. For term life insurance specifically, sales growth is expected to remain relatively flat as economic conditions soften.

But that doesn’t mean it’s a bad time to buy. Competition among carriers remains fierce, and as insurers adjust pricing to capture market share, consumers stand to benefit.

Terry has an important reminder for anyone who has hesitated to shop: “Our research shows people overestimate the cost of coverage by as much as tenfold, meaning it’s way more affordable than those who haven’t shopped think it is.”

And the value of a policy extends beyond the death benefit.

“Life insurance provides financial security and protection, including term products and permanent products, which can provide living benefits,” Terry adds.

For consumers considering coverage in 2026, the combination of competitive pricing, streamlined digital applications and a wide range of product options makes now a smart time to explore what’s available.

Zip Code

Please enter valid zip

Age

Coverage Amount

Coverage Type

Gender

Tobacco Use

Yes No

Compare Quotes

Nupur Gambhir

Managing Editor

Nupur Gambhir is the editor-in-chief of Insure.com and a licensed life, health and disability insurance agent in New York with seven years of experience covering insurance. Her expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Balance, The Financial Gym and MSN. She holds a BA in Economics from The Ohio State University.