Strong sales of corporate-owned life insurance and private placement coverage pumped up U.S. individual life volume during the third quarter.
Total annualized premium volume increased 20% during the third quarter, even though the face amount of coverage sold increased only 7%, and the number of policies sold actually shrank 2%, according to researchers at LIMRA International, Windsor, Conn.
Annualized premiums from new universal life sales were 23% higher than they were in the third quarter of 2006, and annualized premiums from new variable universal life sales were 55% higher.
LIMRA does not release actual sales totals to the general public, but researchers say UL policies accounted for 40% of premiums from new sales and VUL policies accounted for 15%. Term policies accounted for about 23%.
The third-quarter UL and VUL boom appears to be the result of unusual increases in COLI sales and private placement sales at a relatively small number of companies, according to Ashley Durham, a LIMRA analyst.
Overall, “there are a lot fewer agents out there,” Durham says.
Some studies suggest the number has dropped to 160,000, from about 260,000 in 1973, and that decrease and the emphasis on the affluent market have cut the number of policies sold to non-affluent consumers, Durham says.