Individual Life Insurance Premiums And What Affects Them

Individual Life Insurance Premiums And What Affects Them

By LifeQuotes.com

According to LIMRA’s third quarter 2013 individual life insurance sales survey, total third quarter individual life insurance new annualized premium remained flat compared to the same period in 2012.

Individual life insurance premiums increased by 4% in the first nine months of 2013.

“While every other product line experienced positive growth in the third quarter, universal life sales were hampered by sustained low interest rates, a volatile investment environment and increased reserve requirements introduced in 2013,” said Ashley Durham, senior analyst, LIMRA insurance Research. “We expect universal life sales to continue to fall into the fourth quarter.”

LIMRA is a global research, consulting, and professional organization that helps more than 850 insurance and financial service companies in 64 countries improve their marketing and distribution effectiveness.

According to LIMRA, new annualized universal life (UL) premiums fell 8% in the third quarter, resulting in a 1% year-to-date increase. The key drivers of the decline were a 31% drop in lifetime guarantee UL premium and a 98% drop in term UL premium.

Indexed UL (IUL) premiums rose 10% in the third quarter and 18% in the first three quarters of the year. IUL market share reached a new high of 35 percent of UL premium and 13 percent of total individual life insurance new annualized premiums.

Whole Life (WL) new annualized premiums increased by 2% in the third quarter, which was lower than in previous quarters. It is, however, the 17th consecutive quarter of positive growth. When compared to previous years, WL improved by more than 5% in the first three quarters of 2013.

The WL policy count was flat in the third quarter, resulting in a 2% year-to-date decline.

Term new annualized premiums increased by 5% in the third quarter, improving by 4% year to date. The majority of the growth, as in the previous quarter, is due to companies discontinuing Term UL and reintroducing traditional term products, as well as those with specific initiatives to increase term sales.

When compared to previous years, term policy count was flat in the third quarter, resulting in a 2% increase for the first nine months of 2013.

The new annualized premium for variable universal life (VUL) increased by 33% in the third quarter. Year to date, VUL premiums have increased by 19%. Policy count increased by 16 percent for the quarter and 8 percent year to date.

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