Permanent Life Insurance Fires up Industry Sales

A third quarter 2018 survey of U.S. life insurance new annualized premium increased 3 percent in the third quarter of 2018, driven by strong indexed universal life (IUL) sales, the LIMRA study showed.

“Market conditions continue to be favorable for IUL products. IUL premium has increased for the past eight consecutive quarters,” said Ashley Durham, associate research director, LIMRA Insurance Research.

IUL premium accounted for 65 percent of all UL premium, and 24 percent of all individual premium for the first three quarters of 2018.

Total UL market share is 37 percent. All permanent life insurance products increased in sales, IUL, WL and VUL, with universal life (UL) remaining flat. The only decline in the permanent life insurance product line sales was Lifetime Guarantee Universal Life (LTGUL), which fell for the sixth consecutive quarter.

Durham noted that at the design level, VUL products with a higher focus on protection were particularly successful and VUL held 6 percent market share of total individual life insurance in the first nine months of 2018.

Brokerage producers boosted WL sales over third quarter 2017. WL premium sold by insurance brokers — including BGAs — jumped 21 percent, compared with prior year. While affiliated WL premium was down 2 percent for the quarter, affiliated agents continued to hold the lion’s share of the WL market in terms of premium (at 64 percent).

Year-to-date, WL premium growth improved 1 percent. WL premium represented 36 percent of the total life market in the first nine months of 2018.

Term life insurance new premium grew 1 percent in the third quarter and year-to-date, compared with 2017. Forty-three percent of participating U.S. term writers reported increases for the quarter, and more than half of the top 20 term carriers reported positive growth.

Life insurance is not about death benefits but promoting a better quality of life. Whole life insurance offers an avenue to diversify investments and protect wealth with consistency that is not found in term life products.

“Perhaps due to the historically high college loan burden carried by today’s graduates, this appreciation of financial security and desire to be debt-free reflects change in attitude from the ‘live for today’ ethos boomers were known for,” Ferik said.

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