Variable life insurance sales with single premiums included at 10% for the 35 companies reporting in the VALUE survey for the third quarter of 2009 were $292.1 million, a 4.2% decrease from second quarter 2009 sales, which were $305 million, but a 45.9% decrease from third quarter 2008 sales, which totaled $540 million.

Year-to-date third quarter 2009 sales were 50.1% lower than sales in the first 9 months of 2008.

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

The market estimate for the first 9 months of 2009 with single premiums included at 10% is $960 million.

Variable life sales with single premiums included at 100% for the companies in the VALUE survey for the third quarter of 2009 were $294.5 million, a 3.9% decrease from second quarter 2009, which had sales of $307 million, and a 46.5% decrease from third quarter 2008 sales, which were $551 million.

The market estimate for the first 9 months of 2009 with single premiums included at 100% is $975 million, down from $1.94 billion for the same period the year before.

For the first quarter of 2009, the top five companies/fleets–John Hancock, Pacific Life, AXA Financial/MONY, Hartford Life and RiverSource–captured 60% of all variable life sales (including single premiums at 10%), while the top 10 companies/fleets garnered 81% of VL sales.

For the companies in the survey, the number of flexible-premium contracts issued during the first 9 months of 2009 decreased 57% from the number issued during the first 9 months of 2008. The average face amount decreased 2% to $419,118.

The total premium for second-to-die products issued during the first 9 months of 2009 for the companies in the survey was $104.3 million, compared to $286 million during the first 9 months of 2008.

The number of second-to-die contracts (including single-premium and flexible-premium products) issued during the first 9 months of 2009 decreased 50% from the same period the year before. The average face amount increased 18% to $2,150,100.

For the companies reporting sales by distribution channel for the first 9 months of 2009, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 45% and 43% of the market, respectively.

Independent broker-dealer firms continued to dominate second-to-die variable life sales, capturing 67% of the market.

As of Sept. 30, 2009, total variable life assets for the companies reporting in VALUE were $104.3 billion, down 3% from $107.4 billion reported on Sept. 30, 2008. Of the total assets reported, 89% were held in a separate account.

Fixed account interest rates on VL policies decreased slightly. The average one-year interest rate was 4.29% on Sept. 30, 2009, down slightly from 4.30% on June 30, 2009. The average renewal rate on Sept. 30, 2009 was 4.33%, the same as on June 30, 2009.

Leah Wolf is with Towers Perrin, of which Tillinghast is a business. She can be reached at leah.wolf@towersperrin.com

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