Clients are showing greater interest in whole life and variable universal life insurance, according to LIMRA data, as they seek guarantees and market-linked growth. The trend points to changing priorities among buyers weighing long-term protection, cash value and investment risk.
The finding matters for consumers, insurers and financial professionals. It suggests that permanent life insurance is gaining attention from clients who want more than a death benefit. Yet the two products meet that demand in very different ways.
Two paths to permanent coverage
Whole life and variable universal life, often called VUL, can remain active for a policyholder’s lifetime if contract requirements are met. Both may build cash value, but their guarantees and risks differ.
Whole life generally offers fixed premiums, a guaranteed death benefit and guaranteed cash-value growth. Some policies may also pay dividends, although those payments are not guaranteed.
VUL gives policyholders access to market-linked investment accounts. Its cash value can rise when investments perform well. It can also fall during market declines, creating added risk for policyholders.
“Clients are gravitating toward whole life and variable universal life as demand for guaranteed and market-linked coverage grows.”
LIMRA’s finding captures two goals that may appear to conflict. Some buyers value the certainty tied to whole life. Others accept investment risk through VUL in pursuit of stronger long-term growth.
Why client priorities may be changing
Permanent life insurance can appeal to clients focused on estate planning, business succession or lifelong support for dependents. Cash value may also provide access to funds, subject to policy terms.
Whole life can suit buyers who prefer predictable premiums and stated guarantees. VUL may attract clients with longer time horizons, higher risk tolerance and a need for flexible planning.
The LIMRA data provided does not identify sales totals, growth rates, client ages or the period measured. That limits conclusions about the trend’s size. It also leaves open whether interest is broad-based or concentrated among wealthier households.
Trade-offs remain central
Greater demand does not mean either policy is suitable for every household. Permanent insurance often costs more than term life insurance because it includes lifetime coverage and a cash-value feature.
Clients comparing the products may need to examine several issues:
- Premium affordability over many years
- Guaranteed benefits and non-guaranteed projections
- Fees, investment choices and market exposure
- Access to cash value through loans or withdrawals
- The effect of withdrawals, loans or poor returns on coverage
VUL requires particular care because investment losses and policy charges can weaken cash value. In some cases, owners may need to pay more to keep coverage active. Whole life reduces direct market exposure, but its growth potential may be lower.
Policy loans and withdrawals also have consequences. They can reduce the death benefit, create interest costs or cause tax issues if a policy lapses with an outstanding loan.
What the shift means for insurers and advisers
Insurers may respond by placing greater emphasis on permanent products that address both protection and accumulation goals. Financial professionals will face pressure to explain guarantees, projections, costs and downside risks in plain language.
The trend also increases the importance of suitability reviews. Advisers must separate a client’s need for insurance from an interest in investment growth. Term coverage, retirement accounts or other savings tools may offer a better fit in some cases.
LIMRA’s finding signals renewed attention to policies designed for lifelong use. Still, interest alone does not establish value. The next indicators to watch are detailed sales results, buyer demographics and policy retention rates. Those measures will show whether the shift becomes a lasting change or remains a short-term preference.