UPDATE 1-PREVIEW-Life insurers in tough spot, may get Fed aid

* Analysts predict Q1 will be worst ever for the industry

* Insurers seek federal funds

* Capital shortfall could spur M&A (Adds Genworth share price)

By Lilla Zuill

NEW YORK, April 9 (Reuters) - U.S. life insurers, already weakened by the global financial crisis, are expected to report their worst-ever quarterly results in the coming weeks, stoking expectations that federal funds will be needed to prevent the sector from becoming the next casualty of the recession.

Some insurers are stronger than others, but the entire sector has been weakened, laying groundwork for takeovers or mergers forced by regulators to head off company failures.

The Dow Jones U.S. Life Insurance Index .DJUSIL has fallen nearly 70 percent since last September as investment losses hit balance sheets.

Hartford Financial Services (HIG.N), a large life and property insurer, has seen its market value shrink more than 80 percent, as has Lincoln National Corp (LNC.N) and Conseco Inc (CNO.N).

Life insurers including MetLife (MET.N), the largest and strongest of U.S. life insurers, and Hartford are due to report first-quarter results later this month.