Indexed universal life has been one of the steadiest growth stories in life insurance. In the second quarter of 2026, that streak broke.
What the numbers show
According to LIMRA's preliminary sales survey, IUL new premium came in just under $1.1 billion for the quarter, down 11% from a year earlier. It was the product line's first year-over-year decline since the second quarter of 2023.
IUL still accounts for 23% of the individual life market by premium, second only to whole life at 37%.
Why one quarter may not be a trend
Context matters here.
- The comparison was tough. LIMRA has noted that IUL posted strong sales in the second and third quarters of 2025, which makes this year's quarters harder to beat.
- LIMRA's researchers were not alarmed. In late July, before the final second-quarter figures were released, LIMRA's director of insurance research said she did not expect the slowdown to continue and predicted IUL would finish 2026 with growth of 8% to 12%.
- The year started with a bullish forecast. In March, LIMRA projected double-digit IUL growth for 2026, citing new products and wider distribution.
The third quarter will show whether the dip was a pause or the start of something longer. Those results usually arrive in November.
What could keep pressure on IUL
LIMRA's own outlook for 2026 flagged a slowing economy and consumer worry about uncertainty. Products that depend on larger, flexible premiums tend to feel that first. The same report shows buyers moving toward smaller whole life policies, with policy count up 8% across the market.
What this means if you sell
- Don't read a quarter as a verdict. IUL remains nearly a quarter of the market.
- Match the product to the client. In a cautious economy, a client who can comfortably fund an IUL is a different conversation from one who needs dependable final expense coverage.
- Keep illustrations realistic. When budgets are tight, clients remember what they were shown. Explain caps, costs, and what happens if the policy is underfunded.
- Diversify what you offer. Agents who can serve both the IUL client and the final expense client are less exposed to a swing in either.