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Life Health > Life Insurance > Permanent Life Insurance

Summer Blahs Hit U.S. Individual Life Market

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What You Need to Know

  • Actual sales of individual non-variable, cash-value life insurance policies were down in the second quarter.
  • Application activity for new individual life policies has been soft.
  • Some products and applicant age groups look stronger than others.

COVID-19 patients crowded into hospitals just nine months ago— but memories of the deadly January surge are fading, and sales of individual cash-value life insurance have cooled.

Market research firm Wink has shown what’s happening in its new U.S. individual life sales report for the second quarter.

Wink bases its reports on voluntary issuer surveys. It asks insurers about traditional fixed universal life insurance, non-variable indexed universal life and whole life, but not about term life or group life.

In the latest quarter, sales of indexed universal life policies were a little higher than in the second quarter of 2021. Sales of traditional universal life and whole life policies were down.

MIB Group’s application activity report for August suggests that working-age people’s interest in new cash-value life insurance policies is especially soft.

What It Means

Life Happens is trying to sell U.S. workers this month, through the Life Insurance Awareness Month campaign, on the idea that protecting loved ones with life insurance is important.

The new survey results hint that inflation may now be doing more to hurt demand than interest in the COVID-19 pandemic is to help it.

If that trend keeps up, advisors may have to spend more time making sure that clients have adequate basic life insurance protection.

In the future, clients may be less likely to come in with life insurance policies that can be used as a source of emergency cash or as a supplement to retirement income arrangements.

The Numbers

Here’s how the Wink life numbers have changed between the second quarter of 2021 and the second quarter of 2022:

Indexed life: $686 million (+12%)

Whole life: $1.1 billion (-5.9%)

Fixed universal life: $105 million (+26%)

The numbers are based on survey responses from 103 insurers, including 49 indexed life providers, 58 universal life providers and 73 whole life providers.

The MIB Numbers

MIB — a Braintree, Massachusetts-based life insurance company consortium — provides systems that life insurers can use to share information for life insurance applicant underwriting purposes.

The group uses its own application-checking volume data to create the application activity index. Consumers filed 4.9% fewer applications for individual life insurance in August than they filed in August 2021, according to MIB data.

Activity was weakest for applicants ages 31 through 60, and it was weaker for cash-value life products than for term life products.

Here are the activity change figures, broken down by age group, for August:

  • Ages zero-30: -4.0%
  • Ages 31-50: -8.8%
  • Ages 51-60: -5.4%
  • Ages 61-70: +1.9%
  • Ages 71 and older: +7.7%

Here’s how activity changed, broken down by product type:

  • Term life: -2.1%
  • Universal life: -8.5%
  • Whole life: -9.6%

The COVID-19 Wildcard

One question is whether the current calm attitude about COVID-19 will persist or if a new surge in cases will lead to new interest in mortality.

The number of new COVID-19 hospitalizations and total U.S. excess rate death rate is now much lower than it was in the first quarter of the year, but comparable to what it was in the summer of 2021, before hospital admissions and deaths surged.

(Image: Adobe Stock)


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