Full year 2005 variable life insurance sales of $2.595 billion were 4.6% lower than full year 2004 sales of $2.72 billion, according to the VALUE survey.

VL insurance sales with single premiums included at 10% for the 42 companies reporting in the VALUE survey for fourth quarter 2005 were $718 million, a 14.2% increase over third quarter 2005, exhibiting the typical seasonality trends of life insurance sales, but a 4% decrease from fourth quarter 2004 sales, which were $748 million.

(Sales include first-year annualized premium, drop-in premiums and 10% of single premiums.)

The market estimate for 2005 with single premiums included at 10% is $2.7 billion, down from $2.85 billion for the full year 2004.

Variable life sales with single premiums included at 100% for the 42 companies in the VALUE survey for fourth quarter 2005 were $727 million, a 14.3% increase over third quarter 2005, which had sales of $636 million, but a 4.6% decrease from fourth quarter 2004 sales, which were $762 million.

The market estimate for 2005 with single premiums included at 100% is $2.765 billion.

For 2005, the top five companies/fleets–IDS, Hartford Life, Pacific Life, MetLife and John Hancock–captured 43% of all VL sales (including single premiums at 10%), while the top 10 companies/fleets garnered 69% of VL sales.

For the companies in the survey, the number of flexible-premium contracts issued during 2005 decreased 11% from the number issued during 2004. The average face amount increased 8% to $365,369.

The single-premium VL market continues to suffer. The total premium for single-premium products for the six companies in VALUE for 2005 was $35 million, compared to $46 million for 2004.

The number of single-premium contracts issued during 2005 was 20% lower than the number issued during 2004. The average face amount increased 5% to $133,401, while the average premium decreased 6% to $52,259.

The total premium for second-to-die products issued during 2005 for the companies in the survey was $266 million, compared to $319 million during 2004.

The number of second-to-die contracts (including single-premium and flexible-premium products) issued during 2005 rose 4% from 2004. The average face amount decreased 9% to $2,132,225.

For the companies reporting sales by distribution channel for 2005, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 56% and 35% of the market, respectively.

Career agents dominated single-premium variable life sales in 2003, capturing 52% of the market. Independent broker-dealer firms and regional firms captured 24% and 21% of the market, respectively, while wirehouses had 2%.

As of Dec. 31, 2005, total variable life assets for the companies reporting in VALUE were $110.5 billion, up 5% from $105.3 billion on Dec. 31, 2004. Of the total assets reported, 91% were held in a separate account.

VALUE classes funds into the following categories: growth, aggressive growth, growth and income, international stock, government bond, corporate bond, high-yield bond, international bond, money market, balanced and specialty (e.g., gold, real estate).

As of Dec. 31, 2005, approximately 78% of the variable life separate account assets were in stock funds; 9%, bond funds; 4%, money market funds; 6%, balanced funds; and 3%, specialty funds.

Fixed account interest rates on VL policies continue to decrease. The average one-year interest rate on Dec. 31, 2005, was 4.18%, down from 4.19% on Sept. 30, 2005. The average renewal rate on Dec. 31, 2005, decreased to 4.22% from 4.25% on Sept. 30, 2005.