WINDSOR, Conn., Feb. 28, 2011 — Total new individual life annualized premium increased two percent in the fourth quarter, resulting in a four percent uptick in 2010, according to LIMRA’s U.S. Individual Life Insurance Sales Survey.
“Throughout the year, Whole Life (WL) and Universal Life (UL) were strong performers, spurring an increase of overall individual life insurance sales,” said Ashley Durham, senior analyst, LIMRA Product Research. “While we have not gotten back to the peak level reached in 2007, we are encouraged by the positive results this year.”
New WL annualized premium improved 14 percent in the fourth quarter and 15 percent in 2010. Policy sales also increased, up six percent for the quarter and two percent for the year. Nearly 60 percent of the writers were able to increase their WL premium this year, including all but one of the top ten. This is the sixth consecutive quarter of growth for WL sales.
New UL annualized premium also performed well in the last three months of 2010, increasing 13 percent. In 2010, UL premium sales rose 10 percent, raising its market share back to 41 percent. Policy count was up 20 percent for the quarter and 21 percent for 2010. The introduction of Term UL products has been influential in the increase in universal life policy sales.
Altogether, 60 percent of UL writers were able to increase their premium sales compared to 2009 sales, including 15 of the top twenty. Products featuring long-term secondary guarantees fell slightly, down five percent compared with 2009; while annualized premium sales for products that do not feature these guarantees grew by 27 percent.
Indexed UL sales grew by 47 percent in 2010; representing nearly 20 percent of 2010 UL annualized premium sales.
“Many factors contributed to indexed UL growth, including increased marketing, training and product introductions,” observed Durham. “Indexed UL sales are also benefiting from the current economic environment. Like other indexed products, indexed UL products’ cash value can grow with market but are also protected against severe market declines.”
Term life insurance premium fell by 16 percent for the quarter and 12 percent for the year, as did term policy sales. This is the largest annual decline for term on record. Some of the things that contributed to the decline include companies dropping product lines ? like longer-duration and return-on-premium (ROP) term products ? and increasing prices.
Variable sales experienced a significant decline in the fourth quarter, dropping 25 percent. Only a quarter of the writers were able to increase their sales over 2009 (a time when sales were down by 50 percent). Year-end results were down seven percent as compared to 2009.
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