Global Equity Indexed Life Insurance Market Overview
Equity Indexed Life Insurance Market Size was estimated at 3.9 (USD Billion) in 2022. The Equity Indexed Life Insurance Market Industry is expected to grow from 4.5 (USD Billion) in 2023 to 15.3 (USD Billion) by 2032. The Equity Indexed Life Insurance Market CAGR (growth rate) is expected to be around 14.60% during the forecast period (2024 - 2032).
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Key Equity Indexed Life Insurance Market Trends Highlighted
Key Market Drivers:There is increased financial literacy and consciousness among consumers of investment products and life insurance policies that are driving the growth of the market for equity-indexed life insurance. Favorable tax treatments and prospects for higher returns in comparison to conventional life insurance types are contributing to this demand. Besides, variable annuities and defined contribution schemes have become popular, which creates room for equity-linked products.
Areas to Explore:
Technological developments like digital platforms and data analytics have given insurers new channels to distribute their products and engage customers. In addition, there is a rising demand for personalized products focusing on specific investor profiles with certain financial goals. Insurers are also considering innovative product designs that mix stock ownership with assured benefits.
Recent Trends:
Some recent trends in the equity-indexed life insurance industry include a shift toward index-based products that combine diversified investment opportunities with potential upside without complete exposure to direct market risks. Moreover, there is an increasing focus on sustainability together with socially responsible investment options as clients look out for goods that match their principles.
Equity Indexed Life Insurance Market Drivers
Rising Demand for Guaranteed Returns Amidst Market Volatility
The increasing volatility in the financial markets has spurred demand for investment products that offer guaranteed returns. Equity-indexed life insurance (EILI) policies provide investors with the potential to earn returns linked to the performance of a stock market index while offering a minimum guaranteed return. This combination of growth potential and downside protection has made EILI policies increasingly attractive to risk-averse investors seeking stable returns in uncertain market conditions.
The growing popularity of EILI policies among individuals and institutions seeking to preserve capital and generate income is expected to drive market growth over the forthcoming years. The EILI market has witnessed a surge in demand from various customer segments, including high-net-worth individuals (HNWIs), retail investors, and institutional investors. HNWIs are increasingly seeking alternative investment options to diversify their portfolios and mitigate risks, while retail investors are drawn to the guaranteed return feature of EILI policies.
Institutional investors, such as pension funds and insurance companies, also recognize the potential of EILI policies as a stable investment vehicle with the potential for long-term growth. This broad-based demand from diverse customer segments is anticipated to fuel the growth of the Equity Indexed Life Insurance Market Industry.
Technological Advancements Enhancing Policyholder Experience
The adoption of advanced technologies is transforming the EILI market by enhancing policyholder experience and streamlining operations. Insurers are leveraging artificial intelligence (AI), machine learning (ML), and data analytics to improve underwriting processes, personalize policy offerings, and provide real-time customer support. AI-powered underwriting algorithms can assess risk profiles more accurately and efficiently, enabling insurers to make faster and more informed decisions.ML algorithms can analyze policyholder data to identify trends and patterns, helping insurers develop customized policies that meet the specific needs of different customer segments.
Additionally, data analytics tools provide insurers with valuable insights into policyholder behavior and preferences, allowing them to tailor their products and services accordingly. These technological advancements are not only improving the overall customer experience but also contributing to the growth of the Equity Indexed Life Insurance Market Industry.
Favorable Regulatory Environment Supporting Market Expansion
The regulatory overview of the EILI policy Market Market seems to be generally favorable. It is noteworthy that governments view EILI products as among the suitable options for guaranteeing financial security and retirement life for individuals. The regulatory bodies are focusing on ensuring that the EILI policies are transparent and are in the best interest of the policyholders. The requirement put in place by the CBNA that Equitable life insurance Indexes must make the terms of the policy available to the policyholders.
The presence of valid guidelines and regulations helps ensure that the market continues to have no fraudulent practices while ensuring that the policy’s market confidence is not eroded. Additionally, the tax consideration, as observed in other jurisdictions, also makes this policy an attractive investment for potential policyholders. It is highly likely that with this supportive atmosphere, the market industry is expected to grow steadily at Equity Indexed Life Insurance.
Equity Indexed Life Insurance Market Segment Insights
Equity Indexed Life Insurance Market Investment Strategy Insights
The Equity Indexed Life Insurance Market is segmented by Investment Strategy into Indexed to Equity Market, Fixed Indexed, and Indexed to Fixed Income. The category of Indexed to Equity Market had the largest market share in 2023 and is also expected to dominate throughout the forecast period. The introduction and rising demand for investment-linked insurance products with higher returns are the attributive factors for the growth of this product segment. The market for Fixed Indexed is expected to grow at a constant growth rate as the strategy provides the advantage of a guaranteed minimum return along with the possibility of receiving other returns, which are directly linked to the performance of the specified market index.Moreover, the market for Indexed to Fixed Income is expected to grow at a moderate growth rate with the possibility of lower returns.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Equity Indexed Life Insurance Market Death Benefit Structure Insights
The Death Benefit Structure segment of the Equity Indexed Life Insurance Market is categorized into Fixed Amount, Minimum Death Benefit, and Excess Death Benefit Rider. The Fixed Amount structure offers a predetermined death benefit, providing stability and predictability for beneficiaries. On the other hand, the Minimum Death Benefit ensures a minimum payout regardless of the policy's performance, offering a safety net for policyholders.
The Excess Death Benefit Rider provides an additional death benefit if the policyholder's death is due to an accidental or specific cause, offering enhanced protection.The Equity Indexed Life Insurance Market revenue is expected to reach USD 338.12 billion in 2024, driven by the increasing demand for flexible and market-linked insurance products. Segmentation insights play a crucial role in understanding the diverse needs and preferences of policyholders, enabling insurers to tailor their offerings and maximize market growth.
Equity Indexed Life Insurance Market Distribution Method Insights
The Equity Indexed Life Insurance Market is segmented based on Distribution Method into Lump Sum, Monthly Income, and Flexible Withdrawal Options. Lump Sum accounted for the largest share of the market in 2023 and is projected to continue its dominance during the forecast period. This segment allows policyholders to receive the full amount of their death benefit in a single lump sum payment, providing immediate access to funds for expenses such as funeral costs, estate settlement, or debt repayment. Monthly Income offers policyholders a steady stream of income payments over a specified period, ensuring financial stability and meeting regular expenses.
Flexible Withdrawal Options provide policyholders with the flexibility to withdraw funds from their policy as needed, offering a customizable solution for unexpected expenses or changes in financial circumstances. The growth of the Monthly Income and Flexible Withdrawal Options segments is attributed to the increasing demand for solutions that provide financial security and flexibility in retirement planning.
Equity Indexed Life Insurance Market Investment Horizon Insights
The Equity Indexed Life Insurance Market segmentation by Investment Horizon includes Long-Term, Short-Term, and Medium-Term. The Long-Term segment is estimated to account for the largest revenue share in 2024, primarily due to the long-term nature of the policies and the increasing demand for guaranteed retirement income.
The Medium-Term segment is projected to witness significant growth over the forecast period, owing to the growing popularity of balanced investment strategies and the need for moderate risk-reward profiles. Overall, the Equity Indexed Life Insurance Market is poised for robust growth in the coming years, driven by factors such as the increasing awareness of financial planning, the rising demand for retirement savings, and the growing popularity of index-linked investment products.
Equity Indexed Life Insurance Market Target Audience Insights
The target audience for Equity Indexed Life Insurance Market is diverse, ranging from High-Net-Worth Individuals to Retail Investors and Institutional Investors. High-Net-Worth Individuals, with their significant financial resources, are drawn to Equity Indexed Life Insurance policies that offer potential upside linked to market performance while providing tax-deferred growth.
Retail Investors, on the other hand, seek a balance between growth potential and downside protection, making Equity Indexed Life Insurance a suitable option. Institutional Investors, such as pension funds and insurance companies, utilize Equity Indexed Life Insurance as a risk management tool within their portfolios, leveraging its potential to enhance returns while mitigating risks.
Equity Indexed Life Insurance Market Regional Insights
Regional Segment Insights Geographically, the Equity Indexed Life Insurance Market is segmented into North America, Europe, APAC, South America, and MEA. North America is expected to dominate the market in 2023, with a share of around 38.5%, and is projected to continue its dominance throughout the forecast period. Europe is expected to follow North America, accounting for a share of around 30.2% in 2023.
The APAC region is anticipated to exhibit the highest growth rate during the forecast period, primarily driven by the increasing awareness of financial planning and growing disposable incomes in countries like China and India.South America and MEA are expected to account for a smaller share of the market but are anticipated to witness steady growth in the coming years.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Equity Indexed Life Insurance Market Key Players And Competitive Insights:
Equity Indexed Life Insurance Market industry major companies are competing on various levels in a bid to gain market share and diversify their product portfolio. Firms are repeatedly working on product innovation, strategic alliances and customer-focused methods to retain their competitiveness in the market. Firms are investing highly in research and development to provide better services to customers and product ranges, which will better satisfy their clients’ needs and requirements, accept new market trends, and improve the value of their products.
Acquisitions and mergers are observed frequently as major companies seek to keep their dominance in the market and gain access to major new markets that were never part of the company’s operations. Short- and long-term marketing strategies, such as advertising and creating a positive brand image, are always present. Building partnership distribution channels and forming alliances with financial advisors, brokers, and other intermediaries are very important in expanding market access within the integrated distribution network.
One of the major companies present in this industry is The Hartford Financial Services Group, Inc. It provides life insurance products tailored to perform a number of functions in terms of clients’ financial goals, such as Universal Life, Term Life, as well as other coverage forms such as disability or long-term care insurance. The Hartford Financial Services Group, Inc. is actively pursuing innovation and has built strong partnerships and distribution networks.
Pacific Life is a high tier company performing in the Equity Indexed Life Insurance Market. One of the main goals is to form a market image that the company can be trusted to meet their clients’ financial needs. The Pacific Life company established itself as a provider of quality financial solutions. According to the status of the competitors in this industry, the two major firms performing in the Equity Indexed Life Insurance Market mentioned above are Hartford Financial Services Group and Pacific Life.
Key Companies in the Equity Indexed Life Insurance Market Include
- Prudential Financial
- The Phoenix Companies, Inc.
- The Penn Mutual Life Insurance Company
- New York Life Insurance Company
- The Guardian Life Insurance Company of Americ
- Athene Holding
- Cigna Corporation
- Transamerica Corporation
- MetLife, Inc.
- John Hancock Life Insurance Company (U.S.)
- Lincoln Financial Group
- Nationwide Mutual Insurance Company
- MassMutual
- Northwestern Mutual
- Pacific Life Insurance
Equity Indexed Life Insurance Market Industry Developments
The Equity Indexed Life Insurance Market is projected to witness significant growth in the coming years, driven by the increasing demand for investment-linked insurance products. In 2023, the market was valued at approximately USD 305.22 billion, and it is expected to reach USD 576.68 billion by 2032, exhibiting a CAGR of 7.33% during the forecast period. The growth of the market can be attributed to the rising awareness about the benefits of Equity Indexed Life Insurance (EILI) products, such as the potential for higher returns, tax advantages, and death benefits.
Additionally, the increasing disposable income and changing lifestyle of individuals in developing countries are contributing to the demand for EILI products. Recent news developments in the market include the launch of new EILI products by major insurance companies and the formation of strategic partnerships to expand distribution channels.
Equity Indexed Life Insurance Market Segmentation Insights
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Equity Indexed Life Insurance Market Investment Strategy Outlook
- Indexed to Equity Market
- Fixed Indexed
- Indexed to Fixed Income
-
Equity Indexed Life Insurance Market Death Benefit Structure Outlook
- Fixed Amount
- Minimum Death Benefit
- Excess Death Benefit Rider
-
Equity Indexed Life Insurance Market Distribution Method Outlook
- Lump Sum
- Monthly Income
- Flexible Withdrawal Options
-
Equity Indexed Life Insurance Market Investment Horizon Outlook
- Long-Term
- Short-Term
- Medium-Term
-
Equity Indexed Life Insurance Market Target Audience Outlook
- High-Net-Worth Individuals
- Retail Investors
- Institutional Investors
-
Equity Indexed Life Insurance Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
| Report Attribute/Metric |
Details |
| Market Size 2022 |
3.9 (USD Billion) |
| Market Size 2023 |
4.5 (USD Billion) |
| Market Size 2032 |
15.3(USD Billion) |
| Compound Annual Growth Rate (CAGR) |
14.60% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Prudential Financial, The Phoenix Companies, Inc., The Penn Mutual Life Insurance Company, New York Life Insurance Company, The Guardian Life Insurance Company of Americ, Athene Holding, Cigna Corporation, Transamerica Corporation, MetLife, Inc., John Hancock Life Insurance Company (U.S.), Lincoln Financial Group, Nationwide Mutual Insurance Company, MassMutual, Northwestern Mutual, Pacific Life Insurance |
| Segments Covered |
Investment Strategy, Death Benefit Structure, Distribution Method, Investment Horizon, Target Audience, Regional |
| Key Market Opportunities |
Increased demand for long-term savings and retirement planning The growing popularity of equity-based investments Favorable regulatory environment in key regions Technological advancements and digitalization Rising affluence and financial literacy in emerging markets |
| Key Market Dynamics |
Growing demand for investment-linked insurance products Increasing awareness of equity-indexed life insurance benefits Favorable regulatory environment in key markets Rising popularity of unit-linked insurance plans Expanding distribution channels |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Equity Indexed Life Insurance Market is expected to reach a valuation of USD 4.5 billion in 2023 and is projected to grow at a CAGR of 14.60%, reaching a value of USD 15.3 billion by 2032.
North America is the dominant region in the Equity Indexed Life Insurance Market, accounting for over 50% of the market share. Asia-Pacific is projected to be the fastest-growing region, with a CAGR of 8.5% during the forecast period.
Rising demand for life insurance products, increasing awareness of financial planning, and favorable government regulations are the primary growth drivers of the Equity Indexed Life Insurance Market.
Some of the key players in the Equity Indexed Life Insurance Market include Allianz, AXA, Prudential Financial, MetLife, and Nippon Life Insurance.
Equity Indexed Life Insurance is primarily used as a retirement savings and investment vehicle. It offers the potential for growth and protection against market downturns.
Regulatory changes, economic fluctuations, and competition from other investment products are some of the challenges faced by the Equity Indexed Life Insurance Market.
The Equity Indexed Life Insurance Market is expected to grow at a CAGR of 14.60% from 2024 to 2032.
The increasing use of technology, the rise of digital insurance platforms, and the growing demand for customized insurance products are some of the key trends shaping the Equity Indexed Life Insurance Market.
The COVID-19 pandemic had a mixed impact on the Equity Indexed Life Insurance Market. While it initially led to a decline in sales, it also raised awareness about the importance of financial planning and protection.
The future prospects of the Equity Indexed Life Insurance Market are positive. Rising disposable income, increasing awareness about financial planning, and favorable government regulations are expected to drive the growth of the market in the coming years.
