After stagnating for half a year, critical illness insurance sales revived in Q3 2017, in terms of both new annualized premiums and number of policies.
Critical illness insurance premiums grew by 15 per cent in Q3 2017 compared with the same period in 2016, the latest LIMRA report confirms. On an annualized basis, $35.8 million in critical illness life insurance premiums were sold in Q3 2017, for all products combined.
Sales of permanent and limited level products were up 21 per cent and 18 per cent respectively at the end of this comparison period. In contrast, sales of the renewable term product dipped three per cent during this period.
In a calculation of growth that covers the first three quarters of 2017, versus the same period of 2016, new annualized premiums advanced by 5 per cent, and the number of new policies increased by 3 per cent.
Sales of permanent products
Sales of permanent and limited level products grew by 4 per cent and 9 per cent respectively during this comparison period. However, sales of the renewable term product shrank by 2 per cent during this period.
Critical illness insurance coverage purchased during this period averaged $75,046. The largest coverage amounts were written in the form of permanent life insurance and level period, for an average of $93,523 and $75,828. The average term insurance amount was $66,166.
Critical illness insurance premiums in force stood at $919,487 million at Sept. 30, 2017, corresponding to 842,306 policies. Sales of limited level products account for the largest volume of premiums in force, at nearly $419 million. They also captured the largest number of policies, at almost 385,000.
During the first three quarters of 2017, both the affiliated and independent networks saw premium growth of 5 per cent compared with the same period in 2016.
These two networks mostly sell limited period level products. The affiliated network saw a 12 per cent rise in premiums for this product during the comparison period. For the independent network, this product rose by 6 per cent during the same period. In fact, in permanent insurance sales the independent network outdid career agents, with growth of 6 per cent versus a meagre one per cent.
This network also better weathered the decline in renewable products than the career network with sales of 0.5 per cent versus a 6 per cent decline for career agents.
Incidentally, not all suppliers witnessed growth. Report author Matthew Rubino points out that slightly less than half of insurers saw their critical illness insurance premiums rise in the first three quarters of 2017, versus the same period in 2016.