The move follows the withdrawal by MetLife Inc. from sales of new life policies to individuals last year. Then the largest U.S. life insurer by assets, MetLife hived off much of its U.S. retail life-insurance operations into a new company named Brighthouse FinancialInc. Brighthouse became a publicly traded company in August of 2017.

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Both Voya and MetLife continue to sell life insurance to employers through group-benefit arrangements. But those and many other insurers face a sluggish environment for selling these policies directly to American families, many of whom are more concerned about outliving their savings than dying prematurely. Voya has a large business selling 401(k) and other tax-advantaged retirement-savings programs.

Voya’s chief executive, Rodney O. Martin Jr., said in its third-quarter earnings release that the move to quit selling new life-insurance policies to individuals is in line with the company’s “strategy of largely focusing on the workplace and institutional clients” through retirement, investment-management and employee-benefits offerings. He added that these are “higher-growth, higher-return, capital-light businesses.”

Industrywide, sales of policies to individuals began declining in the 1980s, as many Americans began investing in then-proliferating mutual funds. Up to then, the insurance industry’s combination death-benefit and savings products—known as permanent or cash-value insurance—had been the cornerstone of many households’ finances.

Since the 1980s, sales of individual life-insurance policies have dropped 45%, according to industry-funded research firm Limra. Over the past few years, sales largely flattened, but policy sales were 4% lower in 2017 and down 1% for the first half of this year.

Insurers are struggling with low interest rates, which have made turning a profit on life insurance tougher. Insurers invest customers’ premiums, mostly in high-quality bonds, until they need to pay claims.

For the third quarter, total individual life sales, which primarily consist of indexed life insurance, were $20 million, up from $18 million, Voya said. The unit has contributed about 20% of operating earnings in recent quarters.

As recently as 2012, Voya’s annual individual life-insurance sales totaled $250 million.

For the quarter, Voya reported net income of $142 million, or 87 cents a share, down from $149 million, or 81 cents a share, in the year-earlier quarter. 

The company’s operating earnings, which exclude realized capital gains and losses and other nonrecurring items, tallied $139 million, up from $29 million, aided by higher investment and fee income, among other factors, ahead of consensus expectations.

Write to Leslie Scism at leslie.scism@wsj.com