Windsor, Conn. — Universal life (UL) was the only individual life insurance product to produce more new premiums in the first half of 2008 when compared to the first half of 2007, according to Windsor, Conn.-based LIMRA International Inc.’s Individual Life insurance Sales Report.
“Strong first-quarter UL sales (up 8%) kept overall life insurance sales from dropping during the first six months of 2008,” said Ashley Durham, LIMRA analyst for product research. “Still, second-quarter UL premiums were flat. Death benefit guarantee (DBG) UL sales are slowing for some companies. Price increases and a drying replacement pool have contributed to the decrease in DBG sales. All in all, total new annualized life insurance premium was also flat.”
The biggest drops so far this year were in variable product sales. Variable universal life (VUL) was down 8% for the quarter, and 7% for the first six months of the year.
More companies are introducing VUL products featuring guarantees. In fact, protection-focused VUL edged up 2% compared to the first half of 2007. Still, it only represented 13% of total VUL annualized premium, based on about 70% of the industry.
Whole life premium saw a 1% increase for the quarter, but remained flat for the year. Only 40% of the participating term writers generated more annualized premium than during the first half of 2007.
All in all, more than 55% of the 78 participating companies experienced drops in annualized premium, although only three of these were in the top 10.
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