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Equity Indexed Life Insurance Market Expected to Reach $14.9 Billion by 2032—Allied Market Research

 
2022
Equity Indexed Life Insurance Market

Report Code : A223007

quote The equity indexed life insurance market is dominant in the financial industry because it offers a unique combination of life insurance protection and the potential for market-linked returns, making it an attractive option for individuals seeking both security and growth opportunities in their financial portfolios. quote

Pradeep Ravi- Lead Analyst
BFSI at Allied Market Research

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According to a new report published by Allied Market Research, titled, “Equity Indexed Life Insurance Market, 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): Global Opportunity Analysis And Industry Forecast, 2023-2032". 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.

Insurance companies are progressively giving customization choices for equity-indexed life insurance contracts. This trend enabled policyholders to adjust their coverage and investing plans to better fit with their financial goals and risk tolerance. Furthermore, insurance companies are creating more complex and adaptable crediting systems based on equities indexes. This enabled policyholders to receive potentially larger returns, providing an appealing alternative to typical fixed or variable life insurance. In addition, within the insurance industry, there is an increasing emphasis on transparency and customer protection. Regulatory organizations are actively monitoring the EILI market to ensure that policyholders fully understand the product and the risks it entails. Moreover, Many EILI plans are being promoted with income riders, such riders give policyholders the opportunity to convert their accumulated cash value into a guaranteed income stream after retirement, responding to the demands of individuals looking for retirement planning options. Therefore, these equity indexed life insurance market trends are helping the market grow.

Furthermore, major market players have undertaken various strategies to increase the competition and offer enhanced services to their customers, for instance, in May 2023, symetra life insurance company has launched two new indexed universal life insurance (IUL) policies, symetra accumulator ascend and symetra protection, both of which can be combined with the new critical care advantage rider. Moreover, accumulator ascent IUL, with strong policy distributions for future income potential and appealing performance features, now provides customers with even greater cash accumulation potential, allowing for large policy dividends.

Furthermore, in November 2022, Symetra Life Insurance has launched a new version of its protection-focused indexed universal life insurance (IUL), the Symetra protector IUL is a flexible-premium adjustable life insurance policy with a default protection benefit and seven index-linked interest alternatives that offer guaranteed death benefit protection as well as the possibility of policy cash value growth. These strategies reflect efforts of the equity indexed life insurance industry which helps to expand its global footprint and leverage technology to deliver better services to clients.

By type, the whole life insurance segment attained the highest market share in 2022 in the equity indexed life insurance market forecast, this attributed to the fact that whole life insurance policies offer a sense of security and stability that appeals to risk-averse consumers. Unlike some other equity indexed life insurance products that are linked to market performance, whole life insurance provides guaranteed cash values and death benefits, ensuring that policyholders and their beneficiaries receive a predetermined payout regardless of market fluctuations. This reliability makes it an attractive choice for those who prioritize financial certainty. Meanwhile, variable universal life insurance (VUL) segment is projected to be the fastest-growing segment during the forecast period. This is due to VUL policies offer a unique blend of flexibility and potential for growth that appeals to a specific subset of consumers. Unlike traditional whole life insurance, VUL allows policyholders to invest their cash value in a variety of investment options, often including equity funds, bonds, or money market accounts. This flexibility enables policyholders to participate directly in the financial markets and potentially benefit from higher returns, which can be particularly appealing during periods of strong market performance.

On the basis of region, North America attained the highest market share in 2022 and emerged as the leading region in the equity indexed life insurance market analysis due to North America has a mature and well-developed insurance industry, which provides an ideal environment for innovative insurance products like equity-indexed life insurance to flourish.

The region's strong regulatory framework and consumer protection measures teach trust in financial products, encouraging individuals to invest in such insurance policies. On the other hand, the Asia-Pacific is projected to be the fastest-growing region for the equity indexed life insurance market during the forecast period. This growth is attributed to the fact that Asia-Pacific region's rising middle class and increasing disposable income have created a growing demand for financial products that offer both insurance coverage and investment opportunities, which equity-indexed life insurance provides. Moreover, many countries in Asia-Pacific have seen robust economic growth and market development, making it an attractive region for insurance companies to expand their offerings.

The COVID-19 had a moderate impact on the equity indexed life insurance market growth, initially, there was a negative impact since market volatility heightened fears about the possibility of lower equity returns. However, as the pandemic stormed on and interest rates remained low, many people switched to equity-indexed insurance in the hope of earning larger returns than typical savings vehicles. Furthermore, the increased emphasis on financial security and insurance during the pandemic resulted in greater interest in life insurance products in general, which benefitted the equity indexed life insurance market size in the long run.

Key Findings of the Study

  • 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.

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quote Equity Indexed Life Insurance Market 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): Global Opportunity Analysis and Industry Forecast, 2023-2032 quote

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