U.S. individual life insurance premium rises slightly in first quarter 2020New market research from LIMRA. Visit www.limra.com for more information
WINDSOR, Conn., May 28, 2020—Total U.S. Individual life insurance new annualized premium increased 1% in first quarter 2020, compared with first quarter 2019 results. Fewer than half (49%) of individual life insurance writers reported positive growth, compared with first quarter 2019, according to LIMRA’s First Quarter 2020 U.S. Individual Life Insurance Sales Survey.
The total number of individual life insurance policies sold in the first quarter fell 1%, compared with the same quarter of the prior year.
Term product sales recorded the largest absolute dollar increase over first quarter 2019. Term new annualized premium increased 8% in the first quarter. This is the highest percent growth for term sales in 50 quarters (since second quarter 2007). Six in 10 term writers reported positive growth, with 4 in 10 experiencing double-digit growth.
“It is not surprising that term sales increased this quarter. Term products were refiled to comply with the 2017 CSO earlier than permanent products so there wasn’t a year-end push in 2019 to sell products based on the prior table.
In addition, as social distancing practices were adopted late in the first quarter, carriers reported to LIMRA that their online platforms were seeing more activity as people sought coverage while they were at home,” said Elaine Tumicki, corporate vice president, LIMRA Insurance Research. “The majority of online life insurance sales are term products.”
Term market share jumped to 24% in the first quarter 2020. Since 2011, term premium market share has been in the 21-22% range.
Universal life (UL) new annualized premium slipped 3% in the first quarter, driven primarily by declines in fixed UL sales. However, this slowdown was expected given the year-end push to sell products based on the 2001 CSO tables. Total universal life held 34% of the total U.S. life insurance market.
Indexed UL (IUL) new annualized premium decreased 2% in the first quarter. Four in 10 IUL writers reported positive growth. In the first quarter, IUL represented 70% of UL and 24% of all individual life premium.
“Despite the current quarter decline, IUL products continue to be attractive to consumers who are seeking greater investment returns yet fearful of market volatility,” noted Tumicki “This is the first decline in IUL growth in more than three years. IUL had experienced positive growth in 14 consecutive quarters (since second quarter 2016).”
In the first quarter 2020, fixed UL new annualized premium fell 5%. Fixed UL new premium has dropped 11 of the past 12 quarters. Fixed UL was 30% of total UL sales and 10% of total life premiums in the first quarter.
Variable & Whole Life
Variable universal life (VUL) new annualized premium climbed 3% in the first quarter, thanks to the continued success of a few companies concentrating on protection-focused products. In the first quarter, VUL represented 7% of the total U.S. life insurance, which is 1 percentage point higher than first quarter 2019.
Whole life (WL) new annualized premium dropped 1% in the first quarter. This is the second consecutive quarter of declines. More than half of WL carriers (52%) reported declines. WL premium represents 35% of the total individual life insurance market. This is the lowest market share for WL since 2015.
LIMRA’s First Quarter 2020 U.S. Individual Life Insurance Sales Survey represents approximately 80% of the U.S. individual life insurance annualized premium market.
The latest data table and additional statistics on U.S. life insurance sales trends can be viewed in the newly updated Fact Tank.
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