|Copyright:||(c) 2010 A.M. Best Company, Inc.|
|Source:||A.M. Best Company, Inc.|
Total U.S. sales of individual life insurance, measured by new annualized premium, were flat in the third quarter while a new product, term/universal life, is generating interest, according to LIMRA.
The latest data on total individual life sales follows increases of 10% the first quarter and 7% in the second, the industry research organization said.
Universal life policies with no-lapse guarantees, representing about half of all UL sales, dropped 9% for the quarter. But total UL market share is back up to 41%, one percentage point below its peak in 2007, LIMRA said.
Some of the growth is due to new term/UL policies, particularly in terms of face and policy sales, it said.
Term/UL “offers consumers the flexibility between term and permanent life insurance at the cost of a term product,” said
Term/UL is currently only sold by a few companies. Term life is one of the most popular products for the middle-income market.
It competes favorably with term rates but provides them with the flexibility to continue the policy if they need coverage for longer than expected, he said (BestWire,
Term sales continued to fall, with premium and policies both seeing 16% declines, LIMRA said. Price increases and/or dropped product offerings to support higher reserve requirements were to blame. Overall, 75% of the term writers experienced sales drops, LIMRA said.
Year-to-date, new premium for term is 10% lower than the first nine months of 2009, while policy count is down 11%, it said.
After 15 years of sharp price declines, term insurance premiums began to rise in 2009, according to executives at Swiss Re Life & Health America (Best’s Review,
Universal life continued to show gains, as premium was up 8% from last year’s third quarter, LIMRA said. Indexed UL products are stimulating sales overall, growing nearly 45% for both the quarter and year to date.
After a few positive quarters, premium sales for stock-market-linked variable UL were back down, falling 6% from the same period a year ago, LIMRA said.
VUL sales “continue to struggle with nearly 60% of the companies selling fewer premiums than they had during the first nine months of 2009, when sales dropped more than 50 percent,” said
<p>Sales of whole life improved 6% in the third quarter. “Whole life sales growth has slowed compared with the 15 and 23% increases seen in the first few quarters of the year,” Durham said in a statement. As of
For the first nine months of 2010, total individual life sales grew 6%, LIMRA said.
In 2009, total new annualized premium declined 15%. In March, Durham said sales wouldn’t return to 2008 levels for about two years. Sales in 2009 stood at