Total new annualized premium revenue from individual life insurance sales dropped just 5% in the fourth quarter of 2009, according to LIMRA.

The fourth quarter was a big improvement over the rest of 2009. New annualized premium revenue from individual life sales was 26% lower in the first quarter of 2009 than in the first quarter of 2008, 21% lower in the second quarter, and 16% lower for the entire year, according to LIMRA, Windsor, Conn.

“We are encouraged that all product sales are showing signs of recovery,” says Ashley Durham, LIMRA senior analyst for product research.

For universal life, for example, overall sales were 20% lower in 2009 than in 2008. But the sales decline narrowed to 3% in the fourth quarter, from 30% in the first and second quarters and 15% in the third.

Sales of universal life products with guaranteed death benefits fell by about 11% in 2009; sales of UL products without death benefit guarantees fell 26%. As a result of that difference, the GDBUL market share of UL sales increased to 53 %, from 48% percent in 2008, LIMRA reports.

Although premiums from new UL sales declined, the number of UL policies sold was 5% higher in 2009 than in 2008, LIMRA found.

“We are selling more smaller face policies to more people,” Durham says. “This trend reverses what we have observed for the last decade.”

Universal life still accounts for the largest share of annualized life premium at 38%, with whole life accounting for 28% of annualized life premium and term, 27%.

Fourth-quarter variable products sales remained depressed, down 36% when compared with sales for the fourth quarter of 2008. But fourth-quarter sales were an improvement over the full-year results. For the year, variable product sales were down 50%.

Term life sales were reasonably stable in 2009: They were up 1% in the fourth quarter and down just 1% for the year.

Whole life sales dropped by less than 10% during the first of the year, then increased 12% in the second half. For the year, whole life sales increased 4%, making whole life the only product line included in the new LIMRA results that performed better in 2009 in terms of sales revenue than in 2008. The number of whole life policies sold was up 6% in the fourth quarter.

Overall, the total number of individual life policies sold increased 3% in the fourth quarter and dropped 2% for the year.