Individual life insurance sales dropped 20 percent in the second quarter of 2009, following on the heels of a 26 percent drop in the first, according to LIMRA. That’s the steepest six-month decline in nearly 70 years. Premium sales overall have fallen 23 percent so far this year.
“Despite recording the steepest six month decline since the second half of 1942, the second quarter gave us reasons to be hopeful,” said Ashley Durham, LIMRA senior analyst. “Forty percent of companies were able to increase their total individual life sales over the second quarter of 2008 (this compared to less than 30 percent in Q1).”
Sales of variable annuities, which have the strongest ties to the market, continue their downward trend, off 50 percent for the second quarter and 55 percent for the first six months of 2009. Universal life sales dropped 29 percent and 27 percent for same periods respectively. These latest number reflect four quarters in a row of double-digit declines.
Whole life and term have proven to be most resilient in this tough market. Whole life declined three percent in the second quarter and four percent during the first six months. Term saw dips of three percent for the two periods in question. Together these two product types have retained their 28 percent share of new policies.
The overall number of policies also dropped, down four percent in the second quarter and six percent for the first half. Universal life, which saw an increase of eight percent, was the only product category not to decline in the second quarter. However, the coverage amount for these policies was lower than those sold during the first half of 2008 by an average of 18 percent.