Indexed universal life, whole life insurance leading overall growth


Indexed universal life (IUL) insurance sales accounted for more than one-quarter of overall universal life insurance sales in the first half of the year, according to LIMRA.

IUL sales, which grew by 37% in the second quarter, drove an overall 4% growth in total individual life insurance new annualized premium. However, policy counts were flat for the second quarter, while the six-month tally showed 3% growth.

The whole life insurance (WL) premium market share was 33% in the second quarter, representing the highest WL market share since 1998, LIMRA found.

Overall, first half sales growth was at 3%, compared to the same six-month period in 2011.

“Indexed universal life continues to attract consumers who are interested in the opportunity for cash value growth potential while protecting their principal, which this product provides,” said Ashley Durham, senior research analyst LIMRA product research.

During the first half of the year, IUL sales rose 29%, marking one-in-four universal life (UL) sales.

Total UL new annualized premium grew 6% in the second quarter, and 3% in the first six months of 2012. UL policy count grew 1% in the second quarter — the 13th consecutive quarter of policy count growth. For the first six months of 2012, UL policy count grew 3%.

Lifetime guarantee (LTG) UL premium dropped 8%, dampening overall UL sales. While LTG products represent the highest share of new UL premium (about 35%), IUL are narrowing the gap. In 2009, there was a 40 percentage-point gap between LTG UL and IUL; today, the gap has closed to just 10 percentage points.

Whole life was the second biggest driver of growth. WL premium rose 9% for the second quarter and 9% year-to-date. Nearly three-quarters of WL writers recorded positive growth. Policy count improved 3% in the quarter, rising 5% in the first half.

Variable UL premium dropped 6% in the second quarter, dropping 7% in the first six months. Fewer than one-quarter of the VUL writers were able to increase their sales over the first half of 2011.


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