Life Buyers Loosen Up in Q4
Both LIMRA and Wink saw the most growth in sales of nonvariable indexed life policies.
A stock market rebound pulled U.S. individual life insurance buyers back toward market-linked products in the fourth quarter of 2023, according to survey data from LIMRA and Wink.
Wink focuses on nonvariable permanent life products. LIMRA includes term life and variable products.
Annualized premiums from sales of variable universal life insurance policies, which give the owners a chance to link cash-value growth to the performance of investment funds, were 11% higher in the latest quarter than they were in the fourth quarter of 2022, LIMRA found.
Both LIMRA and Wink saw the most growth in sales of nonvariable indexed life policies, which provide a cash-value growth floor but let owners link value growth to the performance of an investment index. Both organizations recorded a drop in sales of whole life policies, which are designed to insulate owners from any market growth and to hold premiums, death benefits and cash-value growth steady.
What it means: The life sales numbers show consumers warming to the idea of getting more involved in the stock market, even in their life insurance policies.
The big picture: LIMRA says overall U.S. individual life sales increased 4% in the latest quarter from year-earlier levels, to $4.2 billion.
The number of policies sold increased 2%. LIMRA did not provide a policy count. The American Council of Life Insurers’ 2023 Life Insurers Fact Book shows that U.S. life insurers sell an average of about 2.4 million individual life policies per quarter.
The Wink numbers: Wink tracks fewer life products than does LIMRA, and its list of participating life insurers is different.
Here’s how Wink saw sales revenue changing for some products between the fourth quarter of 2022 and the latest quarter:
- Indexed universal life and indexed whole life: $799 million (+5.1%)
- Traditional universal life: $96 million (-11%)
- Whole life: $1.2 billion (-6.4%)
The LIMRA numbers: LIMRA estimates that the insurers that send it quarterly sales data account for about 85% of the U.S. individual life market.
- Variable universal life: $536 million (+11%)
- Traditional universal life: $266 million (+9%)
- Term life: $745 million (+6%)
- Indexed universal life: $1.1 billion (+3%)
- Whole life: $1.6 billion (-1%)
- Total: $4.2 billion (+4%)
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