Bank life insurance sales were lower in 2011 when compared with 2010 but the statistic is deceiving; in the third quarter of 2010, banks sold $513 million in life insurance premiums, more than they had in any other quarter on record.

The findings, coming from the Kehrer-LIMRA Life Report found that bank life insurance sales were lower when compared with 2010, but quarter-to quarter growth in 2011 was steadily positive with the majority of top writers and manufacturers growing their sales during not only the third quarter but also the first nine months of 2011.

The statistics are positive especially when viewed in light of the commotion caused a couple years back when major companies enacted changes in their bank life sales that altered the market and caused sales to plummet; Allstate removed itself from the market and Transamerica eliminated the sale of its leading product.

There have been other changes in the bank life insurance market.  A decade or so ago, first –year recurring premium represented half of the dollars sold for both banks and the general market.  Myriad of changes have made flexible premium products less of a fit for banks and now 95 percent of the premium sold in banks is paid in one lump-sum according to the report.

Because Term life insurance has no cash value and insurers the buyer for a specific period, it comprised nearly 20 percent of the recurring premium sold through banks in the third quarter of 2011. While Universal Life and Whole Life products comprise half of the new life insurance premium through banks their drop of 38 percent compared with the first nine months of 2010 this was precipitated by the withdrawal of prominent underwriters coupled with augmentations made to product designs throughout the industry.

Although most manufacturers are still offering term, premium sales were down 15 percent for the third quarter. However, according to LIMRA, due to its affordability, term represents percent of the coverage purchased through banks.

Scott Stathis, managing director of Kehrer-LIMRA said in a statement, “Bank sales are once again trending in the right direction, and an analysis of the life products being sold indicate bank-based reps are starting to get the hang of the wealth transfer life insurance sale.”