Total individual life insurance new annualized premium increased four percent in the first half of 2011, according to LIMRA’s U.S. Individual Life Insurance Sales report.
"Overall, individual life insurance sales slowed from first quarter, but still remained positive, with premium and policy count up one percent compared with second quarter 2010," said Ashley Durham, senior analyst of Windsor-based LIMRA’s product research. "Part of the slowdown in growth is a reflection of a few companies moving away from lifetime death benefit guarantee universal life (UL) products."
Annualized premium sales for death benefit guarantee UL products were three percent lower than they were during second quarter 2010, and level in the first half of the 2011. However, it is important to note that lifetime guarantees remain a strong selling point; these products held 45 percent of UL market share through the second quarter.
Indexed UL growth has also slowed over the past few months, but premium still improved, up 29 percent in the second quarter 2011 compared to prior year, producing a 43 percent hike during the first six months of 2011.
New UL annualized premium rose only 1 percent in the second quarter, which is significantly lower than the 14 percent jump UL experienced in the first quarter.
UL policy count grew 11 percent in the second quarter, resulting in a 14 percent increase for the first half of the year. However, growth was influenced by term/UL, without which, UL policy sales would have only been up 4 percent for the first half of the year.
Whole life (WL) new annualized premium grew 5 percent in the second quarter, resulting in a 10 percent increase for the first six months of 2011. Policy count also grew, up 4 percent for the quarter and 6 percent year to date.
More than 70 percent of writers were able to increase their sales in the second quarter; just over half experienced double-digit increases. In fact, WL by far outpaced all other products in terms of absolute dollar growth in the second quarter.
Variable universal life (VUL) new annualized premium grew three percent in the second quarter. Midyear, VUL premium was nine percent higher than the first six months of 2010, driven by the 16 percent growth in the first quarter. VUL policy count fell 11 percent for the quarter and year to date.
Term life was the only product line to experience a decline in the second quarter. New annualized premium dropped 5 percent for the quarter and eight percent for the year so far. Policy count also declined, down 4 percent for the quarter and eight percent during the first half of 2011. Even if the new term/UL products were included with term (instead of UL) premium and policy sales would be down 3 percent and 4 percent.
