3Q Individual Life Premium Rises 2%, LIMRA Reports

WINDSOR, Conn., Dec. 5, 2016—Third quarter individual new annualized premium rose two percent, compared with prior year, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey.

In the first nine months of 2016, total new annualized premium increased two percent.

“Whole life sales, which have experienced 10 consecutive years of positive growth, played an integral role in overall life insurance sales growth this quarter,” said Ashley Durham, associate research director, LIMRA Insurance Research. “Continued market volatility and low interest rates make whole life products attractive to consumers looking for protection and steady investment growth.”

Total individual life insurance policy count increased one percent. LIMRA anticipates overall policy count to be positive at year end. This would result in the second consecutive year of positive growth, which has not occurred since 2012.

Whole life (WL) premium increased nine percent in the third quarter, and up eight percent as of Sept. 30, 2016.  Sixty-five percent of all WL writers, including 8 of the top 10 reported growth in the first nine months. Year-to-date, WL now represents 36 percent of the total life market.

Universal life (UL) new annualized premium, which holds 37 percent market share, fell two percent in the third quarter and year-to-date. The decline is attributed to low current assumption sales.

After falling seven percent in the second quarter, indexed universal life (IUL) premium was flat for the third quarter, compared with prior year. Before last quarter, IUL had experienced 28 consecutive quarters of positive growth. The regulation AG49, designed to make the illustrations more consistent, has been in effect for a year and continues to dampen sales growth.

Year-to-date, IUL premium increased one percent. Eighty-four percent of IUL sales came from independent agents. IUL now represents 56 percent of UL and 21 percent of all individual life premium.

Lifetime guarantee (LTG) UL premium was flat for the quarter and down two percent year-to-date.  It holds 21 percent of UL market and eight percent of total life premium through the first nine months.

Variable universal life (VUL) premium dropped 10 percent in the third quarter, resulting in a decline of 12 percent in the first three quarters of 2016. Nearly 80 percent of the writers reported declines for the quarter. Sales are very concentrated with the top 10 representing 85 percent of VUL sales.

VUL market share dropped to six percent of total sales year-to-date.

Term life insurance premium rose two percent for the quarter and year-to-date. This represents the eighth consecutive quarter of positive growth.

Term life holds 21 percent market share in the first nine months of 2016.  It has been in the 21-22 range since 2011.

The latest data table and additional statistics on U.S. life insurance sales trends can be found in the newly updated Data Bank.