Record IUL sales don’t diminish the need for continued customer engagement

A strong sales year can make a product look easier to position than it really is. Production climbs, more financial professionals enter the market and the product starts to show up in a wider range of planning conversations.

Success can make it tempting to assume the industry has mastered the product. But I don’t think indexed universal life has reached that point yet.

IUL entered 2026 after outperforming a record-setting individual life market. Premium continues to rise faster than the number of policies, indicating that the industry isn’t simply reaching more consumers. Larger or more heavily funded cases seem to be driving some of this growth.

For financial professionals looking toward the second half of the year, the takeaway goes beyond stronger demand. In my view, more premium per case raises the standard for case design, consumer education and long-term service.

More premium raises the stakes

LIMRA reported that IUL new annualized premium with excess premium reached $1.1 billion in the first quarter of 2026, up 9% from the same period in 2025. IUL represented 25% of total new individual life premium, and six of the 10 largest carriers posted double-digit growth.

Policy count, however, was flat. Premium growth without policy growth suggests that more dollars are going into each policy. Financial professionals can’t treat those cases as routine transactions.

Larger premiums can support meaningful protection and accumulation goals, but maximizing premium isn’t the objective. The funding strategy should reflect the consumer’s goals, risk tolerance and ability to support the policy over time. Poor alignment can magnify the consequences of misunderstood assumptions or weak policy management.

In my experience, a better second-half strategy starts with planning questions. Product comparisons come later. Does the consumer have a lasting need for life insurance? Can they commit to the proposed funding schedule? How would a change in income affect the plan? What role does the policy serve alongside existing savings, retirement accounts and other coverage

IUL can be a powerful tool for the right individual, but it must be positioned with clarity.

Record IUL sales don’t tell the whole story

IUL’s momentum developed within a record year for the broader life insurance market. Total new individual life premium exceeded $17.5 billion in 2025, up 10% year over year. IUL accounted for $4.5 billion of that total, setting quarterly and annual sales records while increasing new premiums 17% and policy sales 8%.

Several forces are contributing to that momentum. Consumers continue to look for tax-efficient retirement strategies, stronger equity markets have supported interest in indexed products, and more financial professionals are becoming comfortable incorporating IUL into broader planning conversations. Expanded distribution and enhanced products have also helped drive demand.

A wider product shelf brings more responsibility. Product design, loan provisions, indexed account options, expenses and underwriting philosophies can vary significantly among carriers. Objective product evaluation and disciplined case design are important when determining where IUL fits and where another solution would better serve the consumer.

More options don’t make IUL the right fit for everyone. Sales figures show what the market is buying. Still, they don’t show whether consumers understand how the policy works or whether it will stay aligned with its original objective over several decades.

The strongest IUL discussions connect three elements: the protection need, the consumer’s funding capacity and realistic expectations for policy performance. Leaving one of these elements underdeveloped can weaken the entire recommendation.

An illustration needs a conversation around it

An illustration is only the starting point. It can demonstrate how a policy could perform under specific assumptions. Still, the real work is helping consumers understand those assumptions, what could change over time and how those changes could affect the policy.  The discussion should also cover surrender periods and charges as well as any other terms and conditions of the policy.

Regulators continue to examine that issue. The National Association of Insurance Commissioners (NAIC) says revisions to Actuarial Guideline 49-A took effect in 2026 to enhance consumer-protection disclosures for IUL illustrations. The NAIC is still looking at ways to make life insurance illustrations and disclosures clearer.

A compliant illustration gives the conversation structure. It can’t have the conversation for us. Financial professionals should explain which values are guaranteed, which depend on future crediting, and how policy charges, premiums, withdrawals and loans can affect results.

A useful explanation addresses questions such as:

• What could happen if credited interest falls below the illustrated rate?
• How would reduced or missed premiums affect the policy?
• Which policy elements can the carrier change?
• How could withdrawals or loans affect cash value and the death benefit?
• What would signal the need for additional funding or another adjustment?

Thorough answers support informed decisions, set realistic expectations and create a stronger foundation for future policy reviews.

Stronger service can turn momentum into progress

For some, policies are sold and then largely forgotten. Annual reviews should be part of the planning process from Day 1, not a service added later if a concern arises.

A consistent review process lets financial professionals compare actual results with the original assumptions, revisit funding and policy performance, examine any loans or withdrawals, and confirm beneficiary designations. Reviews also create space to account for changes in income, family responsibilities, business interests, financial goals or risk tolerance.

Service expectations should be established before the policy is issued. Consumers need to know that annual reviews are part of owning the policy, what information they should retain and which financial or life changes should prompt an earlier discussion.

The industry’s work extends far beyond larger IUL cases. LIMRA’s 2025 Insurance Barometer Study found that about 100 million American adults believe they need more life insurance. Record IUL premiums don’t mean the industry has closed that protection need.

The second half of 2026 gives us a chance to define what IUL momentum will represent. The bigger opportunity lies in strengthening every IUL recommendation through clearer education, proactive policy management, objective product evaluation, and disciplined planning.

Record sales brought IUL more attention. Turning that attention into lasting progress will depend on whether we help consumers choose suitable coverage, understand what they own, and manage it effectively over time.

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