Heading south: Applications for life insurance policies

Since the start of 2016, applications for individually underwritten life insurance policies have steadily dipped. And, according to new research, the downward trajectory continues.

Related: Despite NAIC guideline, IUL insurance sales remain healthy

A new MIB Life Index shows that applications edged down 2.6 percent between December 2016 and January 17, 2017. Except for a marginal uptick in between November and December (0.3 percent), activity has been mostly been in negative territory since July of 2016:

• • • • July-August: -1.3 percent

      • August-Sept.: -2.3 percent

      • Sept.-Oct.:  -0.9 percent

      • Oct.-Nov.: -3.3 percent

The southbound trend contrasts with positive application activity between January and July of 2016:

• • • • Dec. 2015-Jan. 2016: +6.4 percent

      • Jan.-Feb.: +4.6 percent

      • Feb.-Mar.: +4.9 percent

      • Mar.-Apr.: +1.0 percent

      • Apr.-May: +2.6 percent

      • May-June: +1.1 percent

      • June-July: +2.0 percent

“The decline [for the most recent period] was heightened as a result of an exceptionally strong Index value in the January 2016 comparative period,” the report states in a commentary on the findings. “With January 2017 results, it appears the upward slope of the long term trend line may be shifting.

“After a record-setting eight consecutive quarters of growth that ended in Q2 2016, the MIB Life Index lost ground in four of the six remaining months, with declines extending into early 2017,” the report adds. “Month-over-month, January’s application activity was 1.9 percent higher than that of the prior December. In 2016, the composite MIB Life Index finished up [1.3 percent year-to-date]”

The MIB report goes on to note that U.S. life insurance application activity also declined across all three demographic groups tracked in January. Application activity dipped for ages 0-44 (-2.2 percent) 45-59 (-4.8 percent) and 60-plus (-0.2 percent).

Month-over-month results, (January 2017/December 2016) include the following:

• • • • ages 0-44: off -2.3 percent;

      • ages 45-59: up 4.8 percent; and

      • ages 60-plus: up 11.8 percent.

In 2016, application activity for ages 0-44 finished up +1.8 percent year-to-date. Ages 45-59 finished flat at -0.1 percent YTD. And ages 60-plus closed up 1.8 percent YTD.