Individual Life Shows Slight Increase In 2017, LIMRA Says

Total U.S. individual life insurance new annualized premium (premium) increased 1 percent in 2017, compared with 2016 results, according to the LIMRA U.S. Retail Individual Life Insurance Sales Survey. This represents the fourth year of growth in premium for U.S. life insurance.

The study found fourth quarter new premium – driven by declines in universal life and whole life – dropped 1 percent, compared with prior year.

“Most detrimental to growth in the fourth quarter was a 20 percent drop in fixed universal life insurance sales,” noted Ashley Durham, assistant research director, LIMRA Insurance Research. “In fact, non-indexed universal life insurance annualized premium sales fell by more than $100 million in the final quarter of 2017.”

Policy count fell 1 percent in the fourth quarter, down 3 percent in 2017.

In the fourth quarter, whole life (WL) new premium fell 4 percent, despite nearly 6 in 10 carriers reporting positive growth. For the year, WL new premium was flat. The last time WL did not see positive growth for the year was in 2005. WL represented 35 percent of the total U.S. life insurance market in 2017.

Total universal life premium dropped 4 percent in the fourth quarter, but remained 1 percent higher than 2016 sales results.

Indexed UL (IUL) rose 9 percent in the fourth quarter, experiencing the largest growth in absolute dollars. More than half of the writers reported positive growth. For the year, IUL improved 8 percent. IUL represented 59 percent of UL premium and 22 percent of all individual life premium. That’s the highest level since LIMRA began collecting IUL (in 2006). 

Lifetime guarantee (LTG) UL new premium fell 27 percent in the fourth quarter, which represents the third consecutive quarter of declines.  Much of this decline can be attributed to increased rates by some carriers (because of interest rates and the implementation of principal based reserves). In 2017, LTG UL dropped 12 percent, compared with prior year. LTG UL held 19 percent of the UL market and 7 percent of the total US individual life insurance market in 2017.

Total UL represented 38 percent of the U.S. life insurance market in 2017.

Variable life UL (VUL) new premium increased 17 percent in the fourth quarter. For the year, VUL new premium grew 2 percent. Its market share of the total US individual market was 6 percent in 2017, level with prior year.

Term new premium rose slightly in the fourth quarter, up 1 percent. Over half (53 percent) of the carriers reported positive growth. For the year, term improved 2 percent, compared with prior year. Term held a 21 percent market share of the total life insurance market in 2017.

LIMRA’s Fourth Quarter 2017 U.S. Individual Life Insurance Sales Survey represents approximately 80 percent of the U.S. individual life insurance annualized premium market.