WINDSOR, Conn., June 2, 2008 — Universal life (UL) was the only individual life insurance product able to produce more new premium in the first quarter of 2008, according to LIMRA's life insurance sales survey.
"UL sales were up eight percent." said Ashley Durham, LIMRA analyst for product research. "Because UL holds the largest market share (42 percent), total new individual life insurance annualized premium increased one percent despite decreases in variable, whole and term products."
LIMRA reports that variable life (VL) and variable universal life (VUL) products dropped 26 and six percent respectively. Term life products decreased by three percent and whole life (WL) experienced the smallest decline-dropping only one percent.
LIMRA also reports that total face amount in the first quarter remained flat over 2007, while the total number of new policies sold declined by one percent.
The average size UL policy sold did not increase compared to the first quarter of 2007. This may have been impacted by a slight drop in death benefit guarantee UL (DBGUL) market share. On average, DBGUL policies (which tend to be purchased by older more affluent buyers) are 150 percent larger current assumption policies. All other products continued the upward trend in average size policy purchased.
The average VUL policy bought during the first quarter of 2008 was seven percent larger than those purchased in the same period of 2007. Similarly, the average size VL policy increased by five percent, while term and WL increased four and two percent.
Participating companies' individual results were mixed. Forty two of the 78 companies surveyed suffered declines and nearly 70 percent of these declines were in the double digits. At the same time however, nearly 70 percent of the companies that increased individual life annualized premium in the first quarter of 2008 experienced at least double digit increases.
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LIMRA International is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA International at www.limra.com.