Term Life Premium Up 8%, Offsetting Tough 1Q: LIMRA

Term life insurance new premium rose 8% in the first quarter, with 40% of term life writers reporting double-digit increases, according to LIMRA data.

The term premium increase is the highest since the second quarter 2007, according to LIMRA’s First Quarter 2020 U.S. Individual Life Insurance Sales Survey. Sixty percent of term life writers reported positive growth.

LIMRA attributed some of term's success to online access and tools that helped with sales to homebound consumers. Other life products did not fare as well but that was not unexpected because of a late 2019 sales push before a new CSO table took effect.

Term market share jumped to 24% in the first quarter 2020. Since 2011, term premium market share has been in the 21-22% range.

Insurance brokers account for the largest share of term premium (38%) and reported growth of 11% over first quarter 2019, LIMRA reported.

Outside of term life sales, most of the remaining life insurance products posted sluggish first-quarter sales, LIMRA reported. The total number of individual life insurance policies sold in the first quarter fell 1%, compared with the same quarter of the prior year.

• Universal life new annualized premium fell 3%, driven primarily by a decline in fixed UL sales. Total universal life held 34% of the total U.S. life insurance market.
• Indexed UL (IUL) new annualized premium decreased 2% in the quarter, with 40% of IUL writers reporting positive growth. IUL represented 70% of UL and 24% of all individual life premium.
• Fixed UL new annualized premium fell 5%. Fixed UL new premium dropped 11 of the past 12 quarters. Fixed UL was 30% of total UL sales and 10% of total life premiums in the first quarter.
• Variable universal life (VUL) new annualized premium climbed 3% in the first quarter. VUL represented 7% of the total U.S. life insurance, which is 1% higher than first quarter 2019.
• Whole life (WL) new annualized premium dropped 1% in the first quarter, the second consecutive quarter of declines. WL premium represents 35% of the total individual life insurance market. This is the lowest market share for WL since 2015.

However, this slowdown was expected given the year-end push to sell products based on the 2001 CSO tables.

“Despite the current quarter decline, IUL products continue to be attractive to consumers who are seeking greater investment returns yet fearful of market volatility,” noted Tumicki “This is the first decline in IUL growth in more than three years. IUL had experienced positive growth in 14 consecutive quarters (since second quarter 2016).”

LIMRA’s First Quarter 2020 U.S. Individual Life Insurance Sales Survey represents approximately 80% of the U.S. individual life insurance annualized premium market.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.