“According to the 2021 Insurance Barometer study, 36% of Americans said they plan to purchase life insurance this year. For the second quarter in a row, we are seeing that purchase intention translate into strong sales results, “said David Levenson, President and CEO, LIMRA, LOMA and LL Global. “After record life insurance sales in the first quarter, most companies report significant growth in premium and policy sales in the second quarter. Eight out of 10 insurers reported positive premium growth, including each of the top 10 carriers. “
New whole life insurance premiums jumped 25% in the second quarter and the number of policies increased 5% from the previous year. Whole life insurance product sales experienced the strongest growth in terms of absolute dollars and policies sold. Three-quarters of full-life carriers reported positive growth, including nine of the top 10 carriers. Year-to-date (YTD), whole life insurance premiums were 22% higher than sales in the first six months of 2020. Whole life insurance accounted for 36% of the US market life insurance in the second quarter.
“Last year, due to the shutdown, people were unable to meet with their advisors in person, and we have seen significant growth in direct-to-consumer distribution for whole life products. In the second quarter of 2020, sales of D2C whole life insurance increased by 33%. %, ”Levenson noted. “In contrast, growth in whole life insurance sales this quarter was driven by sales from independent and affiliated agents as vaccines became available and more of the country opened up.”
New indexed LCV premiums rose 20% in the second quarter, up 17% year-to-date. The new fixed life insurance premium increased 7% for the quarter. In the first six months of 2021, the fixed LCV premium fell by 2%.
Indexed LCVs represented 24% of the total premium in the second quarter. The fixed UL market share was 8%.
Variable UL (VUL) new premiums increased by 69% compared to the results of the previous year, representing the 15e consecutive quarter of premium increases. All but three LCV carriers reported double-digit increases. YTD, LCV premium increased by 62% compared to the previous year. WWhile protection-focused LCV sales continued to rise (up 27% in the second quarter), accumulation-oriented LCV sales jumped 144% and claimed just over half of the new LCV premium.
Persistently low interest rates, strong stock markets and recent changes in tax legislation (IRC 7702) have made LCV products more attractive to consumers, boosting their growth in recent quarters. LCV had an 11% market share in the second quarter. This is the highest market share for LCV since 2008.
In the second quarter, new premiums for term life insurance were 8% higher than the previous year, with 65% of insurers reporting increases. In the first six months of 2021, new premiums for term life insurance also increased by 8%. The term life insurance market share was 21% in the second quarter.
COVID-19 has raised awareness among consumers about the importance of having life insurance coverage. Almost a third of consumers (31%) said they were more likely to purchase coverage due to the pandemic, ”noted Levenson. “This is so important because too many Americans are living with a life insurance coverage gap, putting the financial security of their loved ones at risk. As we celebrate Life Insurance Awareness Month in September and continue our one-year campaign to Help Protect Our Families, double our efforts to educate Americans about the importance of having adequate life insurance coverage. ”
The LIMRA survey of US individual life insurance sales in the second quarter of 2021 represents approximately 80% of the US individual life insurance annualized premium market.
The latest data table and additional statistics on US life insurance sales trends can be found in the recently updated Fact Tank.
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