1Q Variable Life Sales Climbed 9.8% Over Last Year

The number of single-premium contracts issued during the 1st quarter of 2007 was 46% lower than the number issued during the 1st quarter of 2006. The average face amount decreased 1% to $115,376, while the average premium increased 20% to $60,674.

The total premium for second-to-die products issued during the 1st quarter of 2007 for the companies in the survey was $81.8 million, compared to $61.4 million during the 1st quarter of 2006.

The number of second-to-die contracts (including single-premium and flexible-premium products) issued during the 1st quarter of 2007 increased 8% over the 1st quarter of 2006. The average face amount decreased 5% to $2,284,798.

For the companies reporting sales by distribution channel for the 1st quarter of 2007, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 46% and 38% of the market, respectively.

Career agents and independent broker-dealer firms also dominated second-to-die variable life sales, each capturing 43% of the market.

As of March 31, 2007, total variable life assets for the companies reporting in VALUE were $124.3 billion, almost equal to the total reported on Dec. 31, 2006. Of the total assets reported, 92% 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 March 31, 2007, approximately 74% of the variable life separate account assets were in stock funds; 11%, bond funds; 4%, money market funds; 7%, balanced funds; and 4%, specialty funds.

Fixed account interest rates on VL policies are relatively stable. The average 1-year interest rate on March 31, 2007 was 4.24%, down from 4.25% on Dec. 31, 2006. The average renewal rate on March 31, 2007 increased slightly to 4.29% from 4.28% on Dec. 31, 2006.