Equity indexed life insurance (EILI) also known as indexed universal life insurance (IUL), is a type of life insurance plan that combines traditional life insurance with investment opportunities connected to stock market indices' performance. EILI like regular life insurance, pays a death benefit to the policyholder's beneficiaries upon the policyholder's death, this type of death benefit is usually tax-free. In addition, to the death benefit, EILI policies accumulate cash value over time. A portion of the premium paid by the policyholder is deposited into a cash value account. Moreover, the unique feature of IUL is that the cash value growth is tied to the performance of a selected stock market indexed, such as the S&P 500. Instead of a fixed interest rate, the policy's cash value can potentially grow based on the index's performance. Furthermore, the cash value growth within the policy is normally tax-deferred, which means policyholders do not have to pay taxes on the profits as long as the money remains in the policy, withdrawals or loans against the cash value may also be tax-free up to a specific amount.
The equity indexed life insurance market is driven by technological advancements as digital technologies and internet platforms have shortened the application and underwriting processes, making equity-indexed life insurance (EILI) plans more accessible to consumers, sophisticated data analytics and modeling enable insurers to better analyze risk and offer more personalized plans, potentially lowering policyholder rates. Advances in artificial intelligence (AI) and machine learning enable insurers to optimize investing strategies related to stock market indexed, potentially improving equity indexed life insurance policy performance. Furthermore, investor interest and market performance play a major for growth of the equity indexed life insurance market. However, competing insurance products could hamper the expansion of equity-indexed life insurance markets. EILI policies are a unique combination of insurance and investment, giving policyholders with the possibility of equity market gains while also providing a death benefit. When various insurance products, such as traditional whole life insurance or variable universal life insurance, offer similar features but have distinct risk-reward profiles, consumers may find it difficult to differentiate between them and make educated selections. Furthermore, complexity and lack of transparency must restrict the equity indexed life insurance market growth. On the contrary, the equity-indexed life insurance market can benefit from a long-term investing perspective. EILI policies are suitable for individuals who want to develop their wealth over time while also safeguarding their family and friends with life insurance. Policyholders can benefit from the power of compounding as the cash value within the insurance grows over time, bound to the performance of equities indexed, by taking a long-term approach. This longer investing horizon enables them to adapt to market fluctuations and capitalize on possible gains while avoiding the short-term concerns associated with day-to-day market volatility.
The equity indexed life insurance market is segmented on the basis of type, mode, distribution channel, and region. Based on type, the market is segmented into whole life insurance, universal life insurance, variable universal life insurance, indexed universal life insurance, and others. By mode it is segmented into online, and offline. On the basis of distribution channel it is segmented into insurance companies, agency and brokers, and banks. By region, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The report analysis the profiles of key players operating in the equity indexed life insurance market such as American International Group, Inc., AXA, John Hancock, MetLife Services and Solutions, LLC., Mutual of Omaha Insurance Company, Penn Mutual, Progressive Casualty Insurance Company, Protective Life Corporation, Prudential Financial, Inc., Symetra Life Insurance Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the equity indexed life insurance market.
The equity indexed life insurance market is driven by technological advancements as digital technologies and internet platforms have shortened the application and underwriting processes, making equity-indexed life insurance (EILI) plans more accessible to consumers, sophisticated data analytics and modeling enable insurers to better analyze risk and offer more personalized plans, potentially lowering policyholder rates. Advances in artificial intelligence (AI) and machine learning enable insurers to optimize investing strategies related to stock market indexed, potentially improving equity indexed life insurance policy performance. Furthermore, investor interest and market performance play a major for growth of the equity indexed life insurance market. However, competing insurance products could hamper the expansion of equity-indexed life insurance markets. EILI policies are a unique combination of insurance and investment, giving policyholders with the possibility of equity market gains while also providing a death benefit. When various insurance products, such as traditional whole life insurance or variable universal life insurance, offer similar features but have distinct risk-reward profiles, consumers may find it difficult to differentiate between them and make educated selections. Furthermore, complexity and lack of transparency must restrict the equity indexed life insurance market growth. On the contrary, the equity-indexed life insurance market can benefit from a long-term investing perspective. EILI policies are suitable for individuals who want to develop their wealth over time while also safeguarding their family and friends with life insurance. Policyholders can benefit from the power of compounding as the cash value within the insurance grows over time, bound to the performance of equities indexed, by taking a long-term approach. This longer investing horizon enables them to adapt to market fluctuations and capitalize on possible gains while avoiding the short-term concerns associated with day-to-day market volatility.
The equity indexed life insurance market is segmented on the basis of type, mode, distribution channel, and region. Based on type, the market is segmented into whole life insurance, universal life insurance, variable universal life insurance, indexed universal life insurance, and others. By mode it is segmented into online, and offline. On the basis of distribution channel it is segmented into insurance companies, agency and brokers, and banks. By region, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The report analysis the profiles of key players operating in the equity indexed life insurance market such as American International Group, Inc., AXA, John Hancock, MetLife Services and Solutions, LLC., Mutual of Omaha Insurance Company, Penn Mutual, Progressive Casualty Insurance Company, Protective Life Corporation, Prudential Financial, Inc., Symetra Life Insurance Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the equity indexed life insurance market.
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Key Market Segments
By Type
- Whole Life Insurance
- Universal Life Insurance
- Variable Universal Life Insurance
- Indexed Universal Life Insurance
- Others
By Mode
- Online
- Offline
By Distribution Channel
- Insurance Companies
- Agency and Brokers
- Banks
By Region
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
- Key Market Players
- American International Group, Inc.
- MetLife Services and Solutions, LLC.
- Mutual of Omaha Insurance Company
- Progressive Casualty Insurance Company
- Prudential Financial, Inc.
- AXA
- Protective Life Corporation
- John Hancock
- Penn Mutual
- Symetra Life Insurance Company
Table of Contents
CHAPTER 1: INTRODUCTION
CHAPTER 2: EXECUTIVE SUMMARY
CHAPTER 3: MARKET OVERVIEW
CHAPTER 4: EQUITY INDEXED LIFE INSURANCE MARKET, BY TYPE
CHAPTER 5: EQUITY INDEXED LIFE INSURANCE MARKET, BY MODE
CHAPTER 6: EQUITY INDEXED LIFE INSURANCE MARKET, BY DISTRIBUTION CHANNEL
CHAPTER 7: EQUITY INDEXED LIFE INSURANCE MARKET, BY REGION
CHAPTER 8: COMPETITIVE LANDSCAPE
CHAPTER 9: COMPANY PROFILES
List of Tables
List of Figures
Executive Summary
According to the report, the equity indexed life insurance market was valued at $3.9 billion in 2022, and is estimated to reach $14.9 billion by 2032, growing at a CAGR of 14.6% from 2023 to 2032.The Equity indexed life insurance market is likely to experience a significant growth rate of 14.6% from 2022-2032 owing to increasing market demand from corporate and government/public sector.
Equity indexed life insurance, also known as indexed universal life insurance (IUL), is a type of permanent life insurance policy that combines elements of traditional life insurance with investment features tied to the performance of a specific financial index, such as the S&P 500. It offers policyholders the potential for cash value growth based on the upward movement of the chosen index, while also providing a guaranteed minimum interest rate, safeguarding against market downturns. Premiums paid into an equity indexed life insurance policy are divided between the cost of insurance, administrative fees, and the cash value component. The cash value portion is invested in a variety of indexed accounts, mirroring the performance of the chosen index. When the index experiences gains, the cash value of the policy increases, offering the policyholder the opportunity for higher returns compared to traditional universal life or whole life policies. However, in the event of a downturn in the index, the policy's value is protected by the guaranteed minimum interest rate, ensuring that it doesn't decrease below a certain level. Furthermore, policyholders have the flexibility to allocate their cash value among different indexed accounts or a fixed interest account, providing a level of customization in their investment strategy. Additionally, equity indexed life insurance policies often come with options for riders, allowing policyholders to enhance coverage or access additional benefits for specific needs, such as long-term care or accelerated death benefits. It is important to note that while equity indexed life insurance offers the potential for higher returns than some other forms of life insurance, it also carries certain risks associated with market fluctuations. Policyholders should carefully review the terms, conditions, and investment options of the policy, and may seek advice from financial professionals to ensure it aligns with their long-term financial goals and risk tolerance.
The growth of the equity indexed life insurance market is propelled by several key driving factors. Firstly, the persistent low-interest-rate environment in many global economies has led individuals to seek alternative investment vehicles that offer the potential for higher returns. Equity indexed life insurance provides an appealing option, combining the benefits of life insurance coverage with the potential for market-linked growth. Additionally, increasing awareness and education about financial planning and retirement preparedness have prompted individuals to consider insurance products that can offer both protection and potential for wealth accumulation. Demographic shifts also play a significant role, as an aging population seeks ways to safeguard their financial legacy and provide for beneficiaries. Moreover, technological advancements and the availability of sophisticated modeling tools have enhanced the transparency and understanding of equity indexed life insurance products, making them more accessible to a wider audience. Lastly, the ongoing volatility in financial markets has reinforced the appeal of policies that offer a balance between potential market gains and downside protection. These factors collectively contribute to the sustained growth and popularity of the equity indexed life insurance market.
The growth of the equity indexed life insurance market is influenced by several key restraining and opportunity factors. On the restraining side, market volatility and economic uncertainties can pose challenges. Fluctuations in the financial markets may affect the performance of the underlying index, potentially impacting policyholder returns. Additionally, regulatory changes or shifts in tax policies can have an impact on the attractiveness of these policies. Moreover, the complexity of equity indexed life insurance products and the need for clear communication and understanding can sometimes deter potential buyers. On the other hand, there are significant opportunities for growth in this market. The prolonged low interest rate environment has amplified the appeal of equity indexed policies, as they offer the potential for higher returns compared to traditional fixed-interest products. Increasing awareness of the benefits of equity indexed life insurance, along with advancements in financial education and literacy, can drive market expansion. Additionally, demographic trends, such as an aging population seeking wealth transfer and legacy planning solutions, provide a fertile ground for growth in this market. Technological advancements in the insurance industry, including digital platforms and tools, also enhance accessibility and ease of use for potential policyholders. These factors collectively present opportunities for the equity indexed life insurance market to thrive in the coming years.
The equity indexed life insurance market is segmented on the basis of type, mode, distribution channel, and region. By type, the market is segmented into whole life insurance, universal life insurance, variable universal life insurance, indexed universal life insurance, and others. By mode, it is segmented into online, and offline. On the basis of distribution channel, it is segmented into insurance companies, agency and brokers, and banks. By region, it is analysed across North America, Europe, Asia-Pacific, and LAMEA.
The report analyses the profiles of key players operating in the equity indexed life insurance market such as American International Group, Inc., AXA, John Hancock, MetLife Services and Solutions, LLC., Mutual of Omaha Insurance Company, Penn Mutual, Progressive Casualty Insurance Company, Protective Life Corporation, Prudential Financial, Inc., Symetra Life Insurance Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the equity indexed life insurance market.
Key Market Insights
By type, the whole life insurance segment led the equity indexed life insurance market in terms of revenue in 2022.By mode, the online segment accounted for the highest equity indexed life insurance market share in 2022.
By distribution channel, the insurance companies segment accounted for the highest equity indexed life insurance market share in 2022
By region, North America generated the highest revenue in 2022.Companies Mentioned
- American International Group, Inc.
- MetLife Services and Solutions, LLC.
- Mutual of Omaha Insurance Company
- Progressive Casualty Insurance Company
- Prudential Financial, Inc.
- AXA
- Protective Life Corporation
- John Hancock
- Penn Mutual
- Symetra Life Insurance Company
Methodology
The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.
They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.
They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:
- Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
- Scientific and technical writings for product information and related preemptions
- Regional government and statistical databases for macro analysis
- Authentic news articles and other related releases for market evaluation
- Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast
Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.
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