NU Online News Service, June 22, 11:25 a.m. – LIMRA International, Windsor, Conn., says its survey of individual U.S. life insurance sales shows a 4% increase in annualized premiums over the first quarter of 2000.
Premiums for new term life sales dropped about 24% as a result of regulatory changes that led to a rush on term life insurance in early 2000, but premiums from sales of variable-universal life insurance increased 19%, and sales of universal life products increased 15%, LIMRA says.
Although premiums from new policy sales increased in most categories, the number of policies sold and the face amount of coverage sold decreases, LIMRA says.
The increase in premiums and decrease in amount of coverage sold suggests insurers were collecting a higher average premium rate for each $1,000 of coverage sold.
LIMRA found that uncertainty about the federal estate tax contributed to a noticeable effect on sales of survivorship policies, which are often used for estate planning purposes. The survivorship policy count was down 5% in the first quarter, and the premium amount was down 1%.
But the policies that were sold offered an average of $2.2 million in coverage, up 15% from the average for the first quarter in 2000.
LIMRA based the results on survey responses from 87 life insurance companies and 61 subsidiaries. Participating carriers account for 75% of life sales.