New annualized premium for individual life insurance grew 7% in the first quarter of 2013, with every major product line experiencing positive premium growth, according to a LIMRA survey. Total individual policy count had been increasing slightly over the last two years, but fell 5% in the first quarter. All product lines except term experienced declines in policy count.
Universal life (UL) premium grew 8% in the first quarter, mostly because of strong indexed UL sales. IUL premium increased 23% compared to the first quarter last year, which is the 16th consecutive quarter of growth. UL premium represents 40% of the total individual life insurance market.
Universal life was the biggest driver of growth in the first quarter of 2013. “IUL offers upside potential without the worry of market-related loss, which continues to appeal to today’s buyers,” said Ashley Durham, senior analyst, LIMRA Product Research. UL policy count dropped 18% in the quarter. LIMRA attributes much of the decline to companies discontinuing their term-UL products.
Lifetime guaranteed (LTG) UL premium increased 9% through first quarter 2013. Companies cited improved competitive positions, fire sales, and the ability to keep cost increases to a minimum. LTG now represents 35% of UL premium, down from a high of 53% in 2009. It still represents the largest share of new UL premium.
Whole life sales remained strong in the first quarter of 2013. Premium increased 7% in the first quarter, which is the 15th consecutive quarter of positive growth. WL policy count declined 5% compared to the first quarter of last year. WL market share was 33% in the first three months of 2013.
Term premium grew 3% and policy count grew 1% in the first quarter. More than a third of term writers reported positive growth. Variable universal life (VUL) premium grew 10% in the first quarter, mainly due to sales of small corporate-owned life insurance and private placement. VUL policy count dropped 5% in the first quarter. VUL policy count hasn’t increased for 34 consecutive quarters. For more information, visit www.limra.com.
