Data collected by LIMRA shows that whole life insurance was the biggest contributor to total individual life premium growth in the United States during the first quarter of 2016.
Industry research group LIMRA has released its US Retail Individual Life Insurance Sales Survey for the first quarter of 2016, and it reveals that new annualized premiums for whole life insurance were the main source of growth during the period, increasing by 11%. LIMRA notes that whole life has posted positive results for 10 consecutive years, and that 65% of the insurers that participated in the survey reported growth in this product, including 7 of the top 10 carriers. Whole life now accounts for 36% of the US life market.
Term insurance also did well during Q1, with new premiums up by 3% compared to last year. LIMRA says this is sixth consecutive quarter of growth for the product, but point out that insurers are finding this market "particularly challenging" given the strain of capital requirements, low interest rates, and competitive pricing. Term has a 21% share of the life insurance market.
Universal life (UL) new annualized premium only increased by 1% during the quarter, which LIMRA blames on declines in the sales of lifetime guaranteed universal life products. Indexed universal life (IUL), however, increased by 13% during the period and was the second biggest driver of overall individual life growth. LIMRA says that IUL now represents 56% of UL and 21% of all individual life premiums. Overall, UL accounted for 37% of all life premiums collected in the first quarter of 2016.
Worst performing product
The worst performing product in the US was variable universal life (VUL), which saw new annualized premiums decline by 14% and its market share drop to 6%. "This is a stark change from a year ago when VUL premium jumped 21%," reads the report. "It is likely market volatility at the start of the year dampened sales."