Life Insurance Sales See Boost in Q2 2010

A report from LIMRA notes that life insurance sales grew 7 percent in the second quarter of 2010, compared to last year’s Q2, which produced the worst quarter in seven decades.

Following several years of dropping numbers, life insurance sales are indicating new signs of life, propelled partially due to a 23 percent increase in whole life policies sales in Q2.

Total individual life insurance new annualized premium increased 7 percent in the second quarter and 9 percent for the first six months of 2010, according to the U.S. Individual Life Insurance Sales survey.

According to a LIMRA senior analyst, “Posting a nine percent increase, the results from the first six months of 2010 is encouraging for individual life insurance sales.”

Things appear to be looking up, according to the analyst, stating that 80 percent of the top 20 life insurance companies had increased sales and, more importantly, close to half of all companies witnessed double-digit growth during the first half of 2010.

Whole life saw its fourth consecutive quarter of double-digit growth, and it currently represents 31 percent of total market shares sales, the largest share since 1998. Year-to-date, whole life has grown 19 percent over the first half of 2009.

Universal life also continued to produce gains, with premium up 11 percent in Q2 as compared to Q2 2009. Again, however, universal life sales declined by nearly 30 percent in Q2 2009. For the first six months of 2010, universal life sales showed an increase of 13 percent.

Death-benefit guarantee products also did well, with universal life products with guarantees growing 5 percent and now representing nearly half of universal life annualized premium.

Meantime, non-guaranteed universal life sales increased 26 percent over the first half of 2009. Much of the increase is linked to indexed universal life sales, which increased nearly 40 percent for the quarter and 45 percent for the first six months of 2010. Analysts say that it is the growth of indexed universal life that has been the emerging trend in 2010 that is assisting universal life sales in regaining momentum.

Variable universal life insurance (VUL) premium increased 2 percent for the second quarter, leading to a 6 percent increase for the first half of the year. This time in 2009, VUL premium had fallen 55 percent.

The one product whose premium did not produce growth in the quarter was term life insurance.

New annualized premium for term fell 11 percent for the quarter, down 7 percent year-to-date. Term policy sales dropped even further, decreasing 11 percent for the quarter and 8 percent in the first six months of 2010. New annualized premium for term fell 11 percent for the quarter, down 7 percent year-to-date.

The drops were offset by better universal life and whole life policy sales.

Universal life policy count increased 22 percent for the quarter and 21 percent in the first half of 2010. Whole life grew 8 percent in the second quarter and 4 percent year-to-date, while overall policy count improved 1 percent for the quarter and for the first six months of 2010.