U.S. Individual Life Sales See Worst Year-to-Date Drop in 70 Years

WINDSOR, Conn. September 14 (BestWire) — U.S. sales of individual life insurance dropped 20% in the second quarter. Year-to-date sales saw a 23% decline, which represented the steepest six-month drop in nearly 70 years, according to LIMRA International.

Sales are defined as annualized premium.

Every product line was hit. But variable sales, with the strongest link to the stock market, continued to hurt the most, the industry research organization said. Sales were down about 50% in the quarter and 55% for the first six months of this year.

"Despite recording the steepest six-month decline since the second half of 1942, the second quarter gave us reasons to be hopeful," said Ashley Durham, senior analyst of LIMRA product research, in a statement. Forty percent of companies increased their total individual life sales from the second quarter of 2008, compared to less than 30% in the first quarter, she said.

LIMRA does not release premium numbers but growth rates only.

With sales down 29% for the quarter and 27% for the first half of this year, universal life saw the fourth straight quarter of double-digit declines, LIMRA said. One factor impacting UL premium is fewer seniors buying the policies, which tend to be higher face amounts. Such sales represented more than half of annualized premium last year, LIMRA said.

Whole life and term continue to fare better than the others, the group said. The former fell 3% in the quarter and 4% at the mid-year mark; while the latter dipped 3% for the quarter and year-to-date. Both products kept their 28% market share of new premium issued.

The year 2009 was off to a weak start for U.S. individual life insurance, as premiums from sales dropped 26% in the first quarter, according to LIMRA. New individual life insurance premiums dropped 14% in last year's fourth quarter and ended the year with a 7% dip (Best's Review, June 2009).