IUL Premium Growth Nearly 3X Industry Average In 2Q

Indexed universal life (IUL) was a rock star among life insurance products in the second quarter, according to LIMRA data.

Although annualized premiums for all major life insurance products showed gains in the second quarter, IUL was the primary driver behind those gains. New annualized IUL premium rose 8 percent in the second quarter, nearly three times the overall industry average. In the first half of 2017, new annualized IUL premium grew 7 percent, almost double the overall industry average.

Annualized premiums for all major life insurance products rose 3 percent in the second quarter compared with the year-ago period, LIMRA reported. In the first half of 2017, annualized life insurance premium rose 4 percent compared with the same period last year.

IUL had the largest premium growth of all major life insurance product lines in the second quarter. The product represented 56 percent of universal life premium and 21 percent of all individual life insurance premium, LIMRA said.

“While whole life led the way in terms of absolute dollar growth during the first half of the year, IUL was the primary driver during the second quarter,” Ashley Durham, associate research director, LIMRA Insurance research, said in a news release.

Market Performance Boosts Index, Variable Products

The strong performance of the stock market, which has seen the Standard & Poor's 500 index rise 14 percent this year, has helped index-linked and variable products grow faster than other life insurance lines.

Variable universal life (VUL) new annualized premium rose 5 percent in the second quarter compared to the year-ago period, LIMRA said.

VUL face amounts rose 5 percent in the second quarter compared with the year-ago period and the number of policies rose 2 percent during that time.

In a VUL policy, the cash portion of the policy can be invested in stocks and bonds. This provides more growth in a rising market.

Term life new annualized premiums rose 3 percent in the second quarter compared with the year-ago period, while face amounts rose 6 percent, LIMRA also said.

Whole life new annualized premiums rose 2 percent in the second quarter compared with the second quarter last year. Face amounts rose 4 percent, but the number of whole life policies sold dropped 6 percent, LIMRA said.

LIMRA does not release numbers publicly.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.
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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.