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Indexed Universal Life Drives Overall Growth in 2014


WINDSOR, Conn., March 16, 2015—Individual life insurance new annualized premium grew 11 percent in the fourth quarter 2014; resulting in a 2 percent increase for the year, according to LIMRA’s Retail Individual Life Insurance Survey.

Policy count for every product line improved in the fourth quarter, resulting in an increase of 2 percent overall for the quarter.  For the year, policy count fell 2 percent.  Policy count has declined 6 out of the last 10 years.

Universal life (UL) new annualized premium rose 18 percent in the fourth quarter but remained down 1 percent for the year.  UL market share was 38 percent of total sales in 2014.

“Indexed universal life (IUL) continued to drive growth in the fourth quarter 2014,” noted Ashley Durham, senior research analyst, LIMRA Insurance Research.  “Market conditions and increased carrier and product options have led to a decade of positive growth for IUL.” 

IUL premium grew 36 percent in the fourth quarter and 23 percent in 2014.  IUL experienced the strongest growth in absolute dollars for both the quarter and the year.  IUL now represents the majority of all UL premium at 52 percent and represents 20 percent of all individual life premium. 

Despite the growth in IUL, universal life sales were dampened by the continued sales decline of lifetime guarantee universal life (LTG UL) products in 2014.   LTG UL fell 6 percent in the quarter, and dropped 26 percent for the year.

For the ninth consecutive quarter, variable universal life (VUL) premium recorded positive growth.  VUL new annualized premium jumped 28 percent in the fourth quarter, ending the year 27 percent higher than in 2013.  In 2014, 65 percent of the writers — including eight of the top ten — reported growth. VUL represents 8 percent of total life sales.

Whole life (WL) premium reflected positive growth in the fourth quarter, improving 5 percent.  Marking a 3 percent increase in 2014, WL has experience nine consecutive years of positive growth in new annualized premium.   WL represents 33 percent of the total life market, matching the market share it held in 1998.

Term life insurance premium grew for the first time this year in the fourth quarter, improving 1 percent in the quarter.   In 2014, term premium fell 1 percent compared with 2013.  Term’s market share remained steady at 21 percent.

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