First Half 2011: Individual Life Insurance Sales Up 4 Percent

LIMRA released its “U.S. Individual Life Insurance Sales” report, which indicates total individual life insurance new annualized premium increased four percent in the first half of 2011. Overall, individual life insurance sales slowed from the first quarter, but still remained positive; premium and policy count increased one percent compared with second quarter 2010, according to Ashley Durham, senior analyst, LIMRA product research. Durham attributes the slowdown in growth to 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, lifetime guarantees held 45 percent of UL market share through the second quarter.

Indexed UL growth has also slowed over the past few months, but premiums still improved, up 29 percent in the second quarter of this year compared to 2010, producing a 43 percent hike during the first six months of 2011.

New UL annualized premiums rose only one 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 four percent for the first half of the year.

Whole life (WL) new annualized premium enjoyed a five percent boost in the second quarter, resulting in a 10 percent increase for the first six months of 2011. Policy count also grew, up four percent for the quarter and six percent year to date. WL outpaced all other products in terms of absolute dollar growth in the second quarter.

More than 70 percent of writers increased sales in the second quarter—more than half experienced double-digit increases.

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 five percent for the quarter and eight percent for the year so far. Policy count also declined, down four 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 three percent and four percent.