New life insurance premium up 11% over first half of 2022, LIMRA finds

Total U.S. life insurance new annualized premium increased 6% in the second quarter 2022, the sixth consecutive quarter of premium growth, according to LIMRA’s Second Quarter 2022 U.S. Retail Life Insurance Sales Survey.

In the first six months of 2022, new premium was 11% higher than the same period in 2021.

“Strong indexed universal life and variable universal life sales drove overall premium growth in the second quarter, aided by increased premium limits related to the IRC Section 7702 update,” said John Carroll, senior vice president, head of insurance and annuities, LIMRA and LOMA. “Overall, 4 in 10 life insurers — including more than half of the top 10 carriers — reported premium growth.”

Overall policy sales fell 11% in the second quarter and 9% year-to-date.

“Our research suggests consumers are more concerned about the impact of rising inflation and a possible economic downturn and, as a result, have cut back on spending, including reducing or delaying the purchase of insurance products,” said Carroll. “While these economic concerns are legitimate, our industry needs to emphasize the importance of life insurance to a family’s financial security.”

Indexed universal life (IUL) new annualized premium increased 27% in the second quarter, resulting in 33% growth in the first six months of 2022. Two thirds of all carriers reported IUL premium increases, including eight of the top 10 carriers. Cash-value accumulation IUL products propelled this double-digit growth, which represented 80% of the IUL premium. IUL premium held 28% of market share of the total U.S. life insurance premium in the first half of 2022.

Variable universal life (VUL) new premium grew 29% in the second quarter, marking the 19th consecutive quarter of positive gains. In the first half of 2022, new premium jumped 38% compared with prior year results. While protection-focused VUL sales edged up 5%, the majority of the growth stemmed from accumulation focused products, which experienced close to 50% percent growth over second quarter 2021. VUL held 13% of premium market share in the first six months of 2022.

Fixed universal life new annualized premium dropped 14% in the second quarter and was down 6% in the first half of the year. Products with lifetime guarantees experienced the greatest declines, down 32% in the second quarter. Fixed UL market share remained 7% of the total U.S. life insurance market in the first half of 2022.

Whole Life new annualized premium fell 3% in the second quarter, compared with second quarter 2021 when sales swelled 25%. Despite the decline in the second quarter, WL new premium growth was 3% higher than prior year. Whole life premium represents a third of the total U.S. life insurance market.

Term product sales fell for the third consecutive quarter. In the second quarter, term new premium dropped 6% from prior year and fell 4% YTD. Six in 10 companies sold less premium than they had in second quarter 2021. Term’s market share represented 19% of the total U.S. market in the first six months of 2022.

“Term and whole life are the mainstay products for a majority of Americans seeking life insurance protection. Despite the declines in whole life and term policy sales this quarter, these products represented 86% of policies sold in the first half of 2022,” noted Elaine Tumicki, LIMRA corporate vice president and director of insurance product research. “Our research suggests the need for life insurance has never been greater. To address the growing coverage gap in the U.S., the industry needs to take bold, innovative steps to engage and educate Americans — not just during Life Insurance Awareness Month but year round.”

LIMRA’s Second Quarter 2022 U.S. Individual Life Insurance Sales Survey represents approximately 85% of the U.S. individual life insurance annualized premium market.

This report compiled by InsuranceNewsNet staff.