What You Need to Know
- The number of VUL policies sold increased 28%, year over year.
- Indexed universal life sales also rose.
- Policy counts and premium volume for whole life policy sales moved in different directions.
Clients who bought U.S. individual life insurance in the first quarter were hungry for policies that were designed to do well when the stock market does well, according to new market data from LIMRA.
Variable universal life policies, or policies that combine a minimum level of policy cash value growth with the potential to do better when mutual fund-like investment funds flourish, were the clear sales leader.
The number of VUL policies sold increased 28%, year over year.
The amount of annualized premium revenue set to flow into those VUL policies climbed 50%.
Issuers of indexed universal life policies, or policies that link growth in policy cash value partly to the performance of investment indexes, also posted increases in the number of policies sold and annualized premiums.
Numbers for fixed universal life policies and whole life policies were mixed, and numbers for term life policies were down.
What It Means
In the first quarter, many clients were still making decisions based on the belief that, in the long run, investment markets will probably do well.
The new numbers are relevant to retirement planners as well as insurance advisors, because many purchasers of VUL policies, indexed universal life policies and other cash value policies use the policies in retirement income planning and long-term care planning arrangements.