LIMRA: Third Quarter Individual Life Insurance Premium Tops $3.7 billion in the Third Quarter, Up 5%

WINDSOR, Conn., Nov. 2, 2023—With a majority of carriers reporting higher results in the third quarter, total individual life insurance new annualized premium increased 5% to $3.7 billion year-over-year, according to the preliminary results from LIMRA’s U.S. Retail Individual Life Insurance Sales surveys and estimates. Similarly, 6 in 10 carriers experienced policy sales growth, driving number of policies sold to increase 4% in the third quarter.

In the first nine months of 2023, total new premium was $11.5 billion, slightly below prior year’s results. Year-to-date (YTD), policy sales were 4% higher than the same period in 2022.

“For the third consecutive quarter, term life insurance sales — both premium and policy count — increased year-over-year,” said John Carroll, senior vice president, head of Life & Annuities, LIMRA and LOMA. “Despite inflationary pressures, demand for term product sales, which typically serve younger and middle-income markets, remains strong. This suggests, while consumer interest has waned from its heights during the pandemic, it remains above pre-pandemic levels.”

Term Life
Term new annualized premium was $733 million in the third quarter, up 6%. The number of term policy sales grew 6% in the third quarter. Term policy sales drove the overall policy growth in the third quarter. Seven in 10 term carriers reported gains in new premium and more than half of participating carriers reported increases in the number of policies they sold year-over-year.

In the first nine months of 2023, term new premium was $2.2 billion, a 4% increase year-over-year. Policy count grew 3% YTD. Through the third quarter, term new premium represented 20% of the total U.S. life insurance market.

Whole Life
Whole life new premium totaled $1.4 billion in the third quarter, an increase of 3% year-over-year. A majority of the top whole life carriers reported gains in the quarter. The number of whole life policies sold remained level with prior year. YTD, new premium was $4.5 billion, up 1% from prior year. Policy count increased 3%. Whole life market share measured by premium was 39% in the first nine months of 2023.

Indexed Universal Life
Third quarter 2023 indexed universal life (IUL) premium was $892 million, up 3% from prior year. Policy count jumped 18% year-over-year. YTD, new premium fell 7% to $2.6 billion compared with the nine months of 2022. Through September 2023, the number of policies sold increased 23%, compared with prior year. YTD, IUL premium represented 23% of total U.S. premium sold.

“A majority of IUL carriers reported growth this quarter, citing distribution expansion, new products and enhancements to older products,” said Karen Terry, assistant vice president, head of LIMRA Insurance Product Research. “The impact of the new NAIC model is normalizing but will likely continue to dampen IUL premium growth. LIMRA expects policy sales to increase among a wide range of carriers including those selling in a lower-face market.”

Variable Universal Life
Variable universal life (VUL) premium spiked 16% in the third quarter to $448 million. Although just 4 in 10 VUL carriers experienced gains in the quarter, all of these carriers reported double-digit premium growth. Policy sales increased 3% in the third quarter.

YTD, VUL premium totaled $1.4 billion, a 6% rise from the first nine months of 2022. Policy sales dropped 5% in the first three quarters of the year. YTD, VUL premium represented 12% of the total U.S. life insurance market.

Fixed Universal Life
Despite rising interest rates, fixed universal life (fixed UL) new premium was flat at $219 million. Third quarter policy count fell 7%. YTD, fixed UL new premium was $705 million, 8% lower than the prior year’s results. The number of policies sold dropped 10% YTD. Fixed UL premium held 6% market share in the first half of the year.

LIMRA’s preliminary third quarter 2023 U.S. individual life insurance sales results are based on monthly reporting and preliminary quarterly survey data, representing 80% of the total market. A summary of the results can be found in LIMRA’s Fact Tank.

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