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Life insurance market sees growth for first half of 2013

By Maryalene LaPonsie on October 10th, 2013

Life insurance companies collected more in premiums during the first half of 2013 although the actual number of policies in force decreased slightly.

That's according to the latest data published by LIMRA, a research and consulting organization for the financial and insurance industries. The group notes all life insurance product lines saw increased premiums during the second quarter of the year.

Variable universal and whole life policies see greatest growth

Although all products saw growth in the second quarter, LIMRA found the greatest increase in premiums year-to-date occurred in indexed universal and whole life policies. Since the start of the year, life insurance companies have seen the premiums they collect for variable universal life insurance increase 13 percent. Whole life saw a 6 percent increase in premiums.

The reason for the increase in those products may be linked to continued economic uncertainty.

"Both products are well-matched for a low-interest and uncertain economic climate, offering the principle protection and growth opportunity that consumers are seeking," said Ashley Durham, senior analyst for LIMRA Insurance Research, in a written statement.

Meanwhile, both term life and universal life premiums saw growth of 5 percent year-to-date. Overall, life insurance premiums across all product lines rose 4 percent in the second quarter and 6 percent in the first half of 2013.

Number of policies declines

While the premiums collected by life insurance companies are on the incline, the number of policies is effect is on the decline. So far in 2013, the number of policies has declined 3 percent overall.

The greatest decrease has been in universal life which has seen the number of policies drop by 16 percent so far this year. Whole life policies have decreased by 3 percent.

However, both term life and variable universal life insurance saw increases. Most notable is the jump in variable universal life policies, increasing 10 percent for the second quarter of 2013 and 5 percent year-to-date. Term life policy count increased 5 percent in the second quarter and 3 percent year-to-date.

Although the increased premiums are good news for life insurance companies, the decline in policy count may be a point of concern. Groups such as LIMRA have long sounded the alarm that Americans are underinsured, and decreasing policies indicate consumers may not be receiving the message.

To help encourage more families to compare life insurance quotes and purchase coverage, industry groups have dubbed September Life Insurance Awareness Month. The month is intended to help promote the benefits of affordable life insurance coverage which may, in turn, reverse the decline in the industry's policy count.

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