U.S. Individual Life Insurance Sales Flat In Second Quarter 2019

Courtesy of LIMRA

Total U.S. individual life insurance new annualized premium growth was flat in the second quarter and the first half of 2019, compared with prior year results, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey.

In the second quarter, the number of policies sold decreased 5%, compared with second quarter 2018. Year-to-date, policy count dropped 4%.

Universal life (UL) new annualized premium fell 1% in the second quarter. As a result, UL premium was flat in the first half of the year, compared to prior year. Total UL market share for the second quarter was 36%.

“While fixed UL products continued to dampen overall UL premium growth, indexed products, which are more immune to the pressures of low interest rates and combine market growth potential with market loss protection, continued to shine,” said Ashley Durham, associate research director, LIMRA Insurance Research.

Indexed UL (IUL) recorded its eleventh consecutive quarter of new premium growth with half of IUL manufacturers reporting growth, including 6 of the top 10 top writers. IUL new premium rose 4% in the second quarter and 7% year-to-date. IUL sales represented 67% of UL premium and 24% of all individual life insurance premium in the second quarter.

Lifetime Guarantee Universal Life (LTGUL) declined 11% in the second quarter. This is the ninth consecutive quarter of declines for LTGUL. Six in 10 LTGUL writers reported decreased sales in the second quarter. Year-to-date, LTGUL fell 12%, compared with prior year. LTGUL represented 15% of UL sales and 5% of total life insurance new premium in the second quarter.

Protection-Focused Products

“Variable universal life sales increased for the seventh consecutive quarter,” Durham said. “Much of this growth reflects the continued success of a few companies’ protection-focused products that feature the potential for a lifetime guarantee.”

Variable universal life (VUL) new annualized premium increased 7% in the second quarter and 9% year-to-date. Less than half of the VUL writers reported positive sale growth in the second quarter.

The biggest driver of growth for VUL products continues to be protection-focused products. New premium for protection-focused products grew 23%, whereas premium for accumulation-focused products declined 10% in the quarter. VUL held a 6% market share of total individual life insurance in the second quarter.

Whole Life (WL) new annualized premium was flat in the second quarter, compared to second quarter 2018. Nearly 6 in 10 companies reported declines in the quarter. Year-to-date, WL premium growth fell 1%. WL premium represented 36% of the total life insurance market in the second quarter.

“The long-term low interest rate environment continues to impact whole life reserves and dividends, which has affected whole life sales,” Durham said. “However, increased market volatility and talk of a possible recession could drive more people to choose products like whole life to lock in guaranteed returns.”

Term life insurance new premium grew 1% in the second quarter and year-to-date, compared with 2018 results. About half of all term writers reported increases in premium, including 5 of the top 10 manufacturers. Term life market share was 22% in second quarter 2019.

LIMRA’s Second Quarter 2019 U.S. Individual Life Insurance Sales Survey represents approximately 80%of the U.S. individual life insurance annualized premium market.