NU Online News Service, Nov. 29, 4:03 p.m. – Stock market turmoil hurt sales of individual variable life products in the third quarter, but it helped sales of other individual life products.
LIMRA International, Windsor, Conn., a nonprofit market research group, says member companies are reporting a 37% decrease in premiums from sales of new variable life policies from the third quarter of 2000, and a 26% decrease in premiums from sales of new variable universal policies.
But sales of new individual universal life policies are up 22% for the quarter, and sales of traditional whole life policies are up 8%, LIMRA says.
Policyholders are usually responsible for managing the investment of assets backing VL and VUL policies.
Buyers of UL policies and whole life policies leave investment decisions in the hands of life insurance company money managers. “The relative safety of these products is likely attractive to consumers in the face of the uncertain economic environment,” says Elaine Tumicki, the author of the third-quarter survey report.
LIMRA says changes in federal laws had a big effect on sales of term life insurance and insurance products used in estate planning programs.
Term life sales were down 1% from the third quarter of 2000, but that is a big improvement over results for the first half of 2001, LIMRA says.