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March 06, 2024 at 05:25 PM
Whole life insurance was more popular with life insurance shoppers in February, according to new application activity from MIB.
Total application activity was 3.7% higher last month than in February 2023, and whole life application activity was 5.9% higher.
MIB found that whole life application activity was especially strong for shoppers ages 31 through 59 and shoppers ages 61 and older.
The overall year-over-year activity increase was down from 4.7% in January.
What it means: Clients can use either whole life insurance or universal life insurance in a variety of long-term income and asset planning arrangements. The strong whole life performance might be a sign that some clients want a simpler alternative to universal life arrangements.
Whole life and universal life: A whole life insurance policy is designed to stay in force for the insured’s entire life, with premiums holding steady, the issuer managing the investments and cash value building up on a steady basis inside the policy.
Traditional universal life, indexed universal life and variable universal life policies are set up in such a way that the accounting for the buildup of cash value is separate from the accounting for administrative costs, mortality costs and other costs unrelated to the policy’s cash value. The policies are designed to stay in for an owner’s entire life. Owners may be able to adjust premium payment schedules and tie the growth of cash value to the performance of investment indexes or investment funds.
