The U.S. life insurance industry is poised to benefit from favorable demographics, a sizable protection gap, rising retirement-income needs and continued product innovation. The aging population is supporting demand for life insurance and annuities, while consumers increasingly seek guaranteed income, principal protection and products with living benefits. Digital distribution, automated underwriting and artificial intelligence are also helping insurers simplify the purchasing process, improve customer engagement and expand their reach.
The industry continues to offer meaningful growth opportunities, supported by persistent protection needs, retirement planning demand and greater adoption of digitally enabled products. Individual life insurance sales reached a record $17.5 billion in new annualized premium in 2025, up 10% year over year, while the number of policies sold increased 7%. Although LIMRA expects individual life insurance premium growth to moderate to 2-6% in 2026, underlying demand remains supported by consumers' need for financial protection, wealth transfer and long-term financial planning.
Annuities represent another significant growth avenue. Demand is being fueled by the aging U.S. population and the retirement needs of the large “Peak 65” generation, particularly as many retirees seek alternatives to traditional pensions. LIMRA expects 2026 annuity sales to remain above $450 billion, supported by demographic trends, maturing contracts, product innovation and expanding distribution. Through the first half of 2026, U.S. annuity sales reached a record $228.7 billion, up 1% year over year, with quarterly sales remaining above $100 billion for the 11th consecutive quarter.
Product innovation is further expanding insurers’ addressable markets. Registered index-linked annuities (RILAs) have gained traction by combining market participation with a defined level of downside protection. RILA sales rose 21% year over year to $21.2 billion in the first quarter of 2026, highlighting consumers’ continued appetite for products that balance growth potential with protection. Other protected-growth, guaranteed-income and living-benefit products are also helping insurers address evolving retirement and financial-protection needs.
These trends create multiple avenues for insurers to expand premiums, fees and investment assets. Stronger annuity sales can increase assets under management and investment income, while retirement and protection products provide opportunities for cross-selling and deeper customer relationships. Insurers with competitive products, broad distribution networks, digital underwriting capabilities and strong asset-management platforms can participate in this expanding demand. However, growth remains uneven across product categories. In the second quarter of 2026, whole life and variable universal life showed stronger sales momentum, while indexed universal life and fixed universal life experienced more mixed trends.
Overall, the continued need for life protection and retirement-income solutions, combined with favorable demographics and product innovation, is supporting a constructive growth environment for the U.S. life and annuity insurance market. This backdrop gives life insurers opportunities to grow premiums, fee income and investment assets, even as broader economic conditions grow more uncertain.
Price Performance
The life insurance industry returned 27.5% over the past year, outperforming the Finance sector’s 6.3% growth and the Zacks S&P 500 composite’s 17.3% appreciation.
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3 Insurers to Watch
Life insurers such as Reinsurance Group of America, Incorporated RGA, Lincoln National Corporation LNC and Voya Financial, Inc. VOYA are well positioned to benefit from robust annuity demand, rising retirement needs and growing consumer preference for guaranteed income and protected market participation.
RGA carries a Zacks Rank #2 (Buy), while LNC and VOYA have a Zacks Rank #3 (Hold) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Reinsurance Group, headquartered in Chesterfield, MO, provides life and health, and asset-intensive reinsurance in the United States. It offers individual and group life and health, disability, long-term care, and critical illness reinsurance, and financial solutions. RGA has exposure to the annuity market through reinsurance and spread-based businesses. It stands to benefit from the strengthening annuity market through its asset-intensive reinsurance, longevity and pension risk-transfer businesses. RGA can capture growth as insurers and pension sponsors seek to transfer investment, longevity and capital risks associated with annuity and retirement obligations.
The Zacks Consensus Estimate for Reinsurance Group’s 2026 earnings per share indicates a year-over-year increase of 30.6%. The consensus estimate for revenues is pegged at $26.88 billion, implying a year-over-year improvement of 12.3%.
The consensus estimate for 2027 revenues indicates an increase of 4.9% from the 2026 estimates.
Earnings have grown 26.7% in the past five years, better than the industry average of 4.9%. RGA’s earnings surpassed estimates in each of the last four quarters, with the average surprise being 22.81%. RGA shares have risen 33.1% in the past year.
Lincoln National, headquartered in Radnor, PA, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. LNC is well positioned to participate in the stronger U.S. annuity and retirement market through its Annuities and Retirement Plan Services businesses. Annuities are a core part of LNC's business mix, and the company has been strategically shifting toward spread-based annuity products, which can generate recurring investment spread income while reducing reliance on traditional variable annuities.
The Zacks Consensus Estimate for Lincoln National’s 2026 revenues is pegged at $19.88 billion, implying a year-over-year improvement of 4.2%.
The consensus estimate for 2027 earnings and revenues indicates an increase of 8.6% and 4.7%, respectively, from the 2026 estimates.
Earnings have grown 2.9% in the past five years. LNC earnings surpassed estimates in each of the last four quarters, with the average surprise being 10.88%. LNC shares have risen 1% in the past year.
Voya Financial, based in New York, provides workplace benefits, savings solutions and technologies in the United States and internationally. Voya Financial is positioned to benefit from stronger retirement demand as aging demographics, rising retirement savings and the growing need for lifetime income support expansion in workplace retirement solutions. Its enlarged Retirement platform, following the OneAmerica acquisition, provides significant scale, with client assets of $863 billion and more than 10 million participant accounts as of June 30, 2026. Strong defined-contribution inflows, rising fee-based revenues and continued plan implementations should support recurring revenue growth, while expanded investment offerings could further increase retirement assets and fee income.
The Zacks Consensus Estimate for Voya Financial’s 2026 earnings per share indicates a year-over-year increase of 4%.
The consensus estimate for 2027 earnings and revenues indicates an increase of 23.7% and 11.9%, respectively, from the 2026 estimates.
Earnings have grown 8.8% in the past five years. VOYA earnings surpassed estimates in two of the last four quarters and missed in two. VOYA shares have risen 27.5% in the past year.
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Lincoln National Corporation (LNC): Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA): Free Stock Analysis Report
Voya Financial, Inc. (VOYA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).