Mid-Year Individual Life Premium Stagnant Except Universal Life, Says LIMRA

WINDSOR, Conn., Sept. 3, 2008 — Universal life (UL) was the only individual life insurance product to produce more new premium in the first half of 2008 compared with first half 2007, according to LIMRA’s Individual Life insurance Sales Report.

“Strong first quarter UL sales (up eight percent) kept overall life insurance sales from dropping during the first six months of 2008,” said Ashley Durham, LIMRA analyst for Product Research. “Still, second quarter UL premiums were flat. Death benefit guarantee (DBG) UL sales are slowing for some companies. Price increases and a drying replacement pool have contributed to the decrease in DBG sales. All in all, total new annualized life insurance premium was also flat.”

The biggest drops so far this year were in variable product sales. Variable universal life (VUL) was down eight percent for the quarter and seven percent for the first six months of the year. More companies are introducing VUL products featuring guarantees. In fact, protection-focused VUL edged up two percent compared to the first half of 2007. Still, it only represented 13 percent of total VUL annualized premium, based on about 70 percent of the industry.

Whole life premium saw a one percent increase for the quarter but remained flat for the year. Only 40 percent of the participating term writers generated more annualized premium than during the first half of 2007.

All in all, more than 55 percent of the 78 participating companies experienced drops in annualized premium, although only three of these were in the top 10.

View the latest data table on U.S. life sales trends.

About LIMRA International

LIMRA International is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.