Strong Term Life Sales Lead to Mixed LIMRA Q2 Numbers
Policy counts were up, premiums were down, and Policygenius has a new price index report series.
U.S. consumers bought more term life and whole life policies in the second quarter than in the second quarter of 2019.
The number of traditional fixed universal life coverage policies sold fell sharply.
The total number of individual life policies sold increased 2%, total face amount increased 3%, and total new annualized premiums fell 5%.
LIMRA has given the numbers in a summary of its latest quarterly life insurance issuer survey report. The participants accounted for about for about about 80% of U.S. new annualized individual life premiums.
Resources
- A link to LIMRA’s quarterly life sales report is available here.
- A link to the Policygenius Life Insurance Price Index page is available here.
- An article about LIMRA’s previous life sales report is available here.
Here’s what happened to annualized premiums from the policies sold in the second quarter, broken down by product type, when compared with annualized premiums for the second quarter of 2019:
- Variable Universal Life: +17%
- Term Life: +3%
- Whole Life: -8%
- Indexed Universal Life: -8%
- Traditional Fixed Universal Life: -12%
LIMRA does not give the dollar amount of sales in the survey report summary.
The policy count numbers looked a lot different.
Here’s what happened to the number of policies sold between the second quarter of 2019 and the latest quarter:
- Term Life: +6%
- Whole Life: -3%
- Variable Universal Life: -4%
- Indexed Universal Life: -4%
- Traditional Fixed Universal Life: -26%
Life insurers faced low interest rates in the second quarter. They also faced COVID-19-pandemic-related mortality concerns and underwriting constraints, and uncertainty about the state of the investment markets.
Elaine Tumicki, a corporate vice president at LIMRA, said in a comment included the results announcement that growth in direct-to-consumer sales and strong consumer interest helped increase the number of whole life policies sold.
Low interest rates hurt sales of traditional fixed universal life coverage, Tumicki said.
MIB has put out tables showing that consumers under the age of 45 have been filing far more life applications than they were at the same time last time, possibly because of concern about COVID-19, and possibly because life insurers have responded to the pandemic by expanding access to web-based underwriting processes.
Wink — a company that publishes survey data on sales of U.S. individual whole life and non-variable universal life — says its survey participants have reported a 6% drop in new annualized premiums for indexed life for the second quarter, a 10% drop for whole life, a and a 40% drop for fixed universal life.
Policygenius Price Index
Policygenius, a web-based insurance broker, has started to publish monthly life insurance price reports.
The first report provides average monthly premium data for 20-year term coverage for applicants ages 25, 35, 45 and 55, broken down by sex, with $250,000, $500,000 and $1 million coverage amounts. There are separate tables for smokers and nonsmokers. Policygenius assumes that the applicants qualify for preferred health pricing.
The price for a 25-year-old female smoker, for example, is $35.28.
The highest price, for a 55-year-old male smoker, is $1,024.20.
The highest price in the tables for a smoker is 28.7 times higher than the lowest price for a smoker.
— Read Wink Sees Sharp Drop in Q2 Individual Life Sales, on ThinkAdvisor.
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