Individual whole life new annualized premium increased 6% in the second quarter, driving overall individual life insurance premium to improve 1% for the second quarter, according to LIMRA’s Second Quarter 2014 U.S. Individual Life Insurance Sales report, released Sept. 3.
For the first six months of 2014, total individual new annualized premium dropped 4%, compared with the same period in 2013.
“Holding 34% of the market, whole life’s rebound from a weak first quarter fueled the positive second quarter results for overall individual life premium,” said Benjamin Baldwin, associate analyst, LIMRA Insurance Research. “Over the past six years, whole life has demonstrated strong, consistent growth, which has buoyed overall insurance sales.”
Overall individual life insurance policy count improved 4% for the quarter, which is the first positive quarterly growth in policy count for six quarters. Year to date, policy count is 3% lower than prior year.
Universal life (UL) new annualized premium fell 8% in the second quarter and 13% after the first half of the year. A 33% decline in guaranteed UL in the second quarter contributed substantially to the overall performance of UL in the second quarter.
UL market share was 36% of total life sales at the end of the second quarter.
Indexed universal life (IUL) premium improved 14% in the second quarter, resulting in a 13% percent increase in the first half of 2014. Almost three-fourths of IUL carriers reported increased sales compared with the first half of 2013. IUL represented 42% of total UL premium, and 17% of overall individual life premium in the second quarter.
Variable universal life (VUL) sales rose 30% in the second quarter, growing 23% year-to-date. This is the seventh consecutive quarter of positive growth for VUL. Through half of 2014, all of the top 10 carriers have experienced positive growth. VUL represents 7% of total life insurance sales.
Term life insurance premium was flat in the second quarter, resulting in a 3% decline year-to-date. Term market share remained steady at 23% in the second quarter.
Less than half of middle-market consumers own individual life
Earlier this week, LIMRA also released figures from a new study on middle-market consumers that found less than half of them (46%) own individual life insurance.
While 60% own group life, the coverage often is less than individual policies and is only in place while the person is employed. One in four consumers in the study said they have no life insurance at all. Middle-market consumers also said they were not financially prepared for the death of a family member, with the majority (51%) indicating they would need to make a drastic or significant financial change if that occurred.
“Life insurance is the one product that can help families keep a roof over their heads, provide for basic living expenses and allow time to recover and heal from the loss of a loved one,” said Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global. “LIMRA’s research shows that people do not fully understand the risks they take by not having adequate life insurance coverage.”
Advisors play an important role in helping Americans ensure they have the life insurance coverage they need to protect their families. Half of middle-market consumers said they prefer to buy life insurance face-to-face with a financial professional. LIMRA’s study revealed that consumers want an advisor who can educate, listen and develop trust. In addition, 6 in 10 consumers said it is very important that their advisor represent a respected brand.
September is Life Insurance Awareness Month (LIAM), an educational initiative developed by the Life Happens organization to remind Americans that it’s important to include life insurance in their financial plans.
“Our research revealed that half of middle market consumers are interested in learning how much life insurance coverage they need,” said Kerzner. “Efforts like Life Insurance Awareness Month can be a catalyst to start that important discussion.”
For this study, the middle market was defined as consumers ages 25-64 with annual household incomes of $35,000 to $99,999.
LIMRA is a strong supporter of LIAM and has published its annualLIMRA’s Facts of Lifefact sheet on the importance of life insurance.
You can learn more about Life Insurance Awareness Month at:Lifehappens.org