Total individual life insurance premium grew 3 percent in the first quarter of 2012 compared to the prior year, according to a new report.
LIMRA of Windsor, Conn., published this finding in a summary of results from a survey of U.S. life insurance sales trends. The report reveals that overall policy count rose 5 percent in the first quarter of 2012.
“The biggest driver behind both total premium and policy count growth continues to be whole life,” says Ashley Durham, senior analyst, LIMRA product research. “We saw growth in whole life sales across the industry, including three quarters of our survey’s participants, and all but one of the dominant top 20.
“[Whole life] remains very attractive to consumers looking for security of premium and cash-value guarantees along with lifetime coverage,” adds Durham.
In the first quarter, whole life premium increased 10 percent. Whole life policy count improved 6 percent. Half of all the individual life insurance policies issued in the first quarter were whole life products, the report says.
Measuring annualized premium, whole life market share reached 32 percent in the first quarter — just 7 percentage points lower than universal life, which has held the lion’s share of premium sales since 2003. (At its peak in 2007, UL market share was 20 percentage points higher than whole life.)
Total UL premium was flat in the first quarter, the survey reveals. Policy count grew 5 percent, representing the 12th consecutive quarter of growth in policy count for UL.
Lifetime-guarantee UL premium fell 12 percent in the first quarter of 2012. This product’s market share has been declining over the past few years as companies have had to take steps to mitigate the poor investment environment, and while they still represent the largest portion of overall UL premium, its market share is down to about 35 percent.
Indexed UL jumped 22 percent in the first quarter and IUL policy count grew 41 percent. Companies continue to introduce IUL, and these sales represent more than 25 percent of all UL sold in the first quarter.
Variable UL premium declined 1 percent in the first quarter. VUL policy count dropped 9 percent. Just under a quarter of VUL writers were able to increase their premium sales over first quarter 2011.
Term life insurance sales experienced some positive growth in the first quarter of 2012. New term life premium grew by 1 percent in the first quarter.
According to LIMRA’s sales survey, over half of the writers brought in more new term premium than they had during the first quarter of 2011, including 9 of the top 10 writers. Term policy count grew 4 percent in the first quarter; over half of companies surveyed had issued more policies, including 9 of the top 10 companies.