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Individual life insurance sales up in 2011

By Maryalene LaPonsie on March 12th, 2012

In another sign the economy may be bouncing back from the latest recession, industry group LIMRA is reporting individual life insurance sales were higher in 2011 than the previous year.

Life insurance companies issued 2 percent more policies for a 4 percent increase in annualized premiums. LIMRA states this is only the fourth time in 30 years that policy sales have increased. Whole life policies saw the biggest jump while term life sales experienced a slight decline.

"For the second year in a row, strong whole life sales propelled overall individual life insurance sales growth," said Ashley Durham, senior analyst for LIMRA Product Research, in a press release. "With the economy continuing to struggle, consumers are attracted to the premium and cash-value guarantees, along with lifetime coverage, which whole life offers."

Permanent life insurance plans increase

All permanent life insurance plans saw an increase in either premiums or policy count in 2011. Meanwhile, term life declined in both categories.

  • Whole life: Representing one of the strongest segments of the market, the whole life insurance policy count increased 5 percent last year while annualized premiums were up 9 percent from 2010.
  • Variable universal life: As another form of permanent life insurance, variable universal life saw a significant jump in its annualized premiums last year, up 22 percent from 2010. However, the number of policies sold actually dropped 9 percent in 2011.
  • Universal life: Premiums for universal life policies rose 3 percent in 2011, and the number of policies sold also increased 8 percent from the previous year.
  • Term life: As the only life insurance product to see a decrease in both premiums and policy count, term life policy sales decreased 4 percent in 2011 while premiums were down 6 percent.

Despite the decrease in term life sales, most life insurance coverage in the U.S. comes through term policies. According to LIMRA, 65 percent of current coverage is provided through term life. In addition, almost 40 percent of new policies are written for term coverage. These sales are likely attributed, in part, to the affordable life insurance rates provided by term coverage.

 

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