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Life Health > Life Insurance

Individual life sales down 7%

By Emily Holbrook

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The life insurance industry received some upsetting news today. According to LIMRA, total individual life insurance new annualized premium fell seven percent in the first quarter 2014. 

In its Retail Individual Life Insurance Sales Report, points to universal life sales as the culprit for the drop. ”The decline is being driven by the drop in universal life sales – particularly guaranteed universal life, which fell 48 percent,” said Benjamin Baldwin, associate analyst, LIMRA Insurance Research. “Responding to new reserving requirements implemented in 2013, we saw companies re-pricing or adjusting features on their guaranteed universal life products. If you took guaranteed universal life out of the equation, total individual life premium would actually increase just under one percent.”

More from the sales report:

  • Total universal life (UL) new annualized premium dropped 15 percent in the first quarter 2014.  Policy count fell nine percent. UL market share represents 38 percent of total life insurance premium.
  • Indexed UL (IUL) new annualized premium improved 15 percent in the first quarter 2014. LIMRA attributes the increase to several new entrants in the market, as well as strong growth reported by 9 of the top 10 IUL writers. IUL now represents 39 percent of UL sales and holds 14 percent market share of total individual life premium. In comparison, IUL market share was only eight percent in 2007.
  • Variable universal life (VUL) recorded strong growth in the first quarter 2014. VUL new annualized premium and policy count each increased 20 percent. Half of the top 10 writers reported increases. This is the sixth consecutive quarter of positive growth for VUL. VUL market share represents six percent of total individual life insurance premium. After 18 consecutive quarters of positive growth, whole life new annualized premium declined 3 percent in the first quarter 2014. Policy count was also down four percent.  WL premium represents 32 percent of the total individual life market for the quarter.
  • Term life insurance new annualized premium fell four percent in the first quarter 2014. Two thirds of term writers reported negative growth for the quarter compared to prior year. It is important to note that term experienced significant growth in 2013, due to several companies reintroducing traditional term products replacing their term UL products.  Term’s market share was 23 percent in the first quarter.

The good news, as Baldwin pointed to, is that, if you take LTG UL out of the equation all together, total individual life premium has increased, albeit less than once percent.

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