WINDSOR, Conn. — Strong sustained whole life sales have helped overall individual new annualized premium to a 2% rise through the first nine months of 2016, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey, released on Dec. 5.
The survey found individual new annualized premium rose 2% in the third quarter, compared with prior year, a result that cemented the 2% overall rise for the nine months of 2016.
“Whole life sales, which have experienced 10 consecutive years of positive growth, played an integral role in overall life insurance sales growth this quarter,” said Ashley Durham, associate research director, LIMRA Insurance Research. “Continued market volatility and low interest rates make whole life products attractive to consumers looking for protection and steady investment growth.”
Total individual life insurance policy count increased 1%. LIMRA anticipates overall policy count to be positive at year end. This would result in the second consecutive year of positive growth, which has not occurred since 2012.
Whole life (WL) premium increased 9% in the third quarter, and up 8% as of Sept. 30, 2016. Sixty-five percent of all WL writers, including eight of the top 10, reported growth in the first nine months. Year to date, WL now represents 36% of the total life market.
Universal life (UL) new annualized premium, which holds 37% market share, fell 2% in the third quarter and year to date. The decline is attributed to low current assumption sales.
After falling 7% in the second quarter, indexed universal life (IUL) premium was flat for the third quarter, compared with prior year. Before last quarter, IUL had experienced 28 consecutive quarters of positive growth. The regulation AG49, designed to make the illustrations more consistent, has been in effect for a year and continues to dampen sales growth.
Year to date, IUL premium increased 1%. Eighty-four percent of IUL sales came from independent agents. IUL now represents 56% of UL and 21% of all individual life premium.
Lifetime guarantee (LTG) UL premium was flat for the quarter and down 2% year-to-date. It holds 21% of UL market and 8% of total life premium through the first nine months.
Variable universal life (VUL) premium dropped 10% in the third quarter, resulting in a decline of 12% in the first three quarters of 2016. Nearly 80% of the writers reported declines for the quarter. Sales are very concentrated with the top 10 representing 85% of VUL sales. VUL market share dropped to 6% of total sales year-to-date.
Term life insurance premium rose 2% for the quarter and year to date. This represents the eighth consecutive quarter of positive growth.
Term life holds 21% market share in the first nine months of 2016. It has been in the 21-22% range since 2011.
The latest data table and additional statistics on U.S. life insurance sales trends can be found in LIMRA’s newly updated Data Bank.