Total individual life insurance sales fell 11% in the third quarter, despite a 12% surge in individual whole life policies sales, according to LIMRA.

Ashley Durham

“Whole life’s combination of features, such as simplicity, premium and cash value guarantees and low risk, is proving to be a winning one,” said Ashley Durham, LIMRA senior analyst for product research, in a statement. LIMRA researches trends in the life insurance industry.

She added that mutual companies, which represent two-thirds of whole life sales, did better than public companies. Mutual companies’ sales rose 14%.

After steeper slides in the first two quarters of the year, the total individual annualized premiums sales are down 19% for the first three quarters.

Universal life (UL) sales dropped 14% for the third quarter, marking a lessening from the 30% falls in each of the first two quarters. Combined, UL sales decreased 24% for the year’s first three quarters.

UL sales began falling, at a rate of 12%, in the third quarter last year, as financial markets began turning downward, Durham said. “Still, UL annualized premium sales grew 10% since last quarter, so sales may be stabilizing,” she said.

Third quarter 2009 sales were more grim for variable products, which were down 52% –lower than second quarter sales – bringing the year-to-date decrease to about 55%, LIMRA reported.

Term sales have held steady throughout the year so far, down just 3% in the first and second quarters and flat in the third. The product continues to hold its own, with more than a quarter of the premium market share through the first nine months of the year despite the relatively low cost for term coverage, according to LIMRA.

The overall policy count increased by 1% for the third quarter, but still is down 4% for the year. Whole life policy sales rose 7%, while UL policy sales increased 5%. The UL increase marks the second consecutive quarter with UL policy growth, LIMRA said.