Insurance Machine

WINDSOR, Conn
According to LIMRA's U.S. Individual Life Insurance Sales report, following a drop of 26 percent during the first quarter, individual life insurance annualized premium were reduced by a whopping 20 percent in the second quarter.

For the year up until now, the overall premium sales have fallen by 23 percent and this is regardless of the product line involved.
Ashley Durham, who is a senior analyst for LIMRA product research says that in spite of the fact that the steepest six month decline since the second half of 1942 has been recorded, the second quarter still gave us some reason to be hopeful. She adds that forty percent of companies found a way to increase their total individual life sales during the second quarter of 2008. During the same quarter in 2008 it was only 30 percent.

Since they have the strongest link to the stock and securities market, the sale of Variable products continue to suffer the most, being down in the area of 50 percent during the second quarter and a full 55 percent during the first half of the year.

For example, the sales of Universal life (UL) policies was down by 29 percent for the quarter and for the first six months of 2009, 27 percent. This marks the fourth consecutive quarter in which declines have been in the double digits. In addition to the obvious problem of a poor economy, another possible factor affecting UL premium sales is the noted decline in sales to senior buyers. These policies typically are of higher face amounts and in 2008, represented more than half of annualized premium sales.

The most durable and flexible policies seem to be Whole life and term. While Whole dropped by three percent during the second quarter and by four percent by the mid-year mark; term premium dipped by only three percent for both the first quarter and for the year so far. In both cases the products have continued to hold their position of 28 percent of market share for new premiums issued.

During the second quarter there is an overall drop in the number of policies issued, being down by four percent, with the YTD drop being six percent. Every product experienced some decline during their second quarter with the only xptn being Universal Life, whose sales increased by eight percent.

During the first six months of 2009, on the average, companies appeared to have sold slightly smaller policies than they did during this same time last year. But for the majority of products, the average amount of coverage purchased remained steady. There was one exception however, in that new Universal Life policies tended to have smaller death benefits, being 18 percent lower than those purchased during the first six months of 2008.