Whole life insurance market grows rapidly

Mashrukh Khan: Whole life insurance is a form of permanent life insurance that provides coverage for the entire lifetime of the policyholder, as long as premiums are paid. It combines a guaranteed death benefit with a cash value component that grows over time at a fixed interest rate on a tax-deferred basis.

Premiums remain level throughout the policy’s duration, offering predictability. The cash value can be accessed through loans or withdrawals, though such actions reduce the death benefit if not repaid. Beneficiaries receive the death benefit tax-free upon the policyholder’s passing.

Globally, whole life insurance forms a significant portion of the broader life insurance sector, which collected around USD 3.1 trillion in premiums in 2024 and is projected to reach USD 4.8 trillion by 2035. The overall life insurance market stood at approximately USD 8.25 trillion in 2025, with expectations to grow to USD 9.01 trillion in 2026 at a compound annual growth rate near 9 percent in coming years.

Whole life products contribute to economic stability by channeling long-term savings into capital markets, supporting infrastructure, bonds, and investments that drive growth. They enhance household financial security, reduce reliance on public welfare, and promote savings discipline, particularly in aging populations and emerging economies where protection gaps persist.

However, high premiums limit accessibility in lower-income regions, and slower growth in advanced markets reflects shifts toward term policies and annuities amid economic uncertainty.

Prominent companies offering whole life insurance include global giants such as China Life Insurance, Ping An Insurance, Prudential Financial, MetLife, New York Life, MassMutual, Northwestern Mutual, Guardian, and Allianz.

These firms dominate through strong balance sheets, extensive distribution networks, and innovation in hybrid products blending protection with wealth accumulation. In the United States and Europe, mutual companies like New York Life and Northwestern Mutual lead due to policyholder-focused structures that often pay dividends.

In the Bangladeshi market, whole life insurance remains underdeveloped within a low-penetration environment of 0.3 to 0.5 percent of GDP. Life insurance overall dominates the sector, with gross premiums projected near USD 9.48 billion in 2025 out of a total insurance market of about USD 15.56 billion.

Savings-oriented policies, including those with whole life features, gain traction for combining protection and maturity benefits, yet traditional whole life products face challenges from high costs, limited awareness, and regulatory hurdles. Major players include MetLife Bangladesh (leading with around 27 percent market share), National Life, Delta Life, Jiban Bima Corporation, and Popular Life.

The sector grapples with claim settlement delays and liquidity issues, but government-backed entities and private insurers continue expanding offerings amid rising middle-class demand for long-term security. Growth potential exists, though penetration lags behind regional peers like India.