The mutual needed 75 per cent of members to vote in favour of the deal with Bain Capital, which would have seen LV demutualise.
Instead, 69 per cent of those who voted supported the deal - meaning the LV board was 6 per cent short of its desired result.
The majority of members (85 per cent) did not vote at all, with some 985,760 members not voting.
LV is now reconsidering its options, including a possible deal with rival Royal London.
Its board said continuing to pursue a 'business as usual' strategy in the longer term would “not be in the best interests” of its members, given the level of investment needed in its business and its declining with-profits membership base.
“The board of LV will therefore now move swiftly to reassess its strategic options and explore alternative ways to structure a transaction that will provide the best long-term outcome for our members, as well as our business, employees and wider communities,” it said in a statement today.
Following the vote Alan Cook, LV’s chairman, announced his intention to step down.
“As we move into 2022, I will continue to lead the process to find a way forward that will enable us to provide the right financial outcome for all our members whilst respecting their different wishes,” he said.
“However, I also confirm that as soon as a way forward is agreed that I intend to step down as chair.”
Some 119,225 members voted in favour of the proposed acquisition, whilst 52,561 members voted against the proposals, representing the remaining 31 per cent of the vote.
Those who voted against the deal made up 5 per cent of LV’s 1.16m members.
Royal London confirmed it has offered to enter into “immediate and exclusive” discussions with LV to agree a mutual merger.
LV said it was aware Royal London has made statements concerning its interest in further discussions which it has said might incorporate membership for some or all of our members.
“We expect, amongst other things, to explore such a possibility,” the mutual said.
A spokesperson for Bain said: "Whilst approximately 70 per cent of LV's members voted for our proposal, we respect this outcome is not enough for our transaction to proceed.
“Our proposal for LV was deemed to be the best for members, enabling LV to grow, reduce its debt and maintain its proud heritage.
"It remains crucial that members are looked after and protected. We have always wanted LV to flourish and become a leading company in the sector, that offers more consumer choice and creates more jobs."