Number of New U.S. Individual Life Policies Sold Rises: LIMRA

What You Need to Know

Indexed universal life looked worse than it did earlier in the year.
Fixed universal life sales were down dramatically: 46%.
The LIMRA sales numbers look different from the MIB application activity numbers.

U.S. consumers got more individual life insurance for less money in the fourth quarter of 2020, according to new insurer survey results from LIMRA.

LIMRA found that insurers sold 2% more individual life policies in the latest quarter than in the year-earlier quarter. The total amount of coverage purchased increased 1%, but total new annualized premiums fell 8%.

Consumers ended up with about 10% more death benefit coverage per premium dollar.

LIMRA bases its quarterly life sales figures on data from insurers that account for about 80% of the U.S. individual life market.

Policy Counts

Here’s what happened to new annualized premiums from the sale of certain types of policies between the fourth quarter of 2019 and the latest quarter:

Whole Life: Up 5%
Term Life: Up 4%
Variable Universal Life: Up 1%
Indexed Universal Life: Down 16%
Fixed Universal Life: Down 46%

Survey Background

LIMRA is a Windsor, Connecticut-based life insurance and retirement research consortium. It gives detailed life insurance survey figures to its members and more limited information to the general public. The public survey summaries show what’s happened to sales in percentage terms, but not in dollar terms.

LIMRA asks issuers about term life, whole life, variable universal life, indexed universal life and traditional fixed universal life.

Issuer survey figures from Wink Inc., combined with market share figures from LIMRA, imply that insurers are generating an average of about $3 billion in new annualized premiums from U.S. individual life sales per quarter.

A LIMRA Executive’s Perspective

Elaine Tumicki, a corporate vice president LIMRA, said in a comment on the new survey results that, in the fourth quarter of 2019, a pending shift to new mortality tables and new reserving rules led to a big surge in sales.

“As a result, LIMRA projected overall premium to normalize in 2020 even before the pandemic,” Tumicki said.

Since the COVID-19 pandemic hit, life insurers have been shifting to more use of simplified underwriting and online distribution systems, and that shift has favored sales of term life and whole life products, Tumicki said.

The Age Factor

An organization that helps life insurers share some underwriting data, MIB Group Inc., has reported that the number of U.S. individual life insurance applications processed in the fourth quarter increased 4% between the fourth quarter of 2019 and the fourth quarter of 2020.

MIB found that life application activity was much stronger for applicants under age 60 than for older applicants. Younger people typically pay less for life insurance than older people do.

LIMRA may have recorded an increase in the amount of coverage sold, along with a sharp drop in total new annualized premiums, because the average age of the purchasers is falling.