Life insurance sales plummeted in the first quarter of 2009, the steepest quarterly drop since 1943, according to newly released data from LIMRA International.
Premium from individual life insurance sales declined 26 percent in the first quarter, variable life products faring the worst. Altogether, variable premium fell 61 percent.
"Historically, recessions have had little effect on individual life insurance sales; however, it appears the severity of this current economic downturn has impacted sales dramatically," said Robert Kerzner, president and CEO of LIMRA in a released statement.
Universal life (UL) sales were down 33 percent for the quarter--the third consecutive quarter of double-digit declines. A year ago, UL was the only product line showing strong growth and keeping overall individual life insurance sales afloat.
Despite posting positive growth during the final three quarters of 2008, whole life (WL) also saw a drop in the first quarter, down five percent compared to a year ago. While term insurance experienced the smallest decline, dropping only four percent. Mutual companies that issue the majority of WL were less affected by the Wall Street turmoil, while term products are affordable, likely making them easier to sell right now.
Preliminary estimates reveal that term and WL each represented 28 percent of the annualized premium issued in the U.S. in first quarter of 2009; a record for term and the highest share for WL since 1999.
Overall policy count continued its downward trend in the first quarter, down eight percent. All product lines experienced declines--with VL and VUL dropping the most, 23 and 51 percent respectively.