Filed Under:Life Insurance, Life Products

IUL continues to drive life insurance sales growth

Opinion

The latest life insurance sales statistics reveal that the rapid growth of index universal life products shows no signs of slowing down.

LIMRA announced on Sept. 5 that individual life insurance premium grew 6 percent in the first half of 2013, despite policy count declining by 3 percent over the same period. Index universal life and whole life drove the increase.

See also: LIMRA: Life premiums up 6% YTD

“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, LIMRA Insurance Research.

Universal life policy count fell 16 percent in the first half of 2013, but new premium still managed to rise by 1 percent. Index universal life, meanwhile, continues to be the hot product. New premium is up 23 percent so far this year — and that’s compared to the product's already strong figures from 2012, when IUL premium was up 29 percent over 2011. LIMRA said the growth of IUL has been the biggest driver of overall sales growth this year.

Everybody loves IUL, it seems. What’s not to love? Unlike traditional universal life, where interest is credited based on a declared rate determined by the insurance company, IUL interest is credited based on the performance of an index or indexes. And unlike variable universal life, IUL offers protection to the cash value. You’ve got upside crediting potential with protection against market downturns. This has proven to be a winning formula in a low interest rate environment.

Fox Business had this to say about IUL recently: “An emerging and fast-growing contract design — the indexed universal life (IUL) policy — may come very close to being the ideal contract for most consumers in today’s interest and overall market environment.”

In the past year, a number of carriers, including Genworth, ING and John Hancock, have introduced new IUL products designed for a variety of intended purposes. Carriers have worked to simplify the products by streamlining the paralyzing array of options and choices available within a product, and they continue to devote considerable resources to train agents on IUL products. The illustrations are also better, making it easier to communicate the benefits of these products to consumers.

If you aren’t on the IUL bandwagon yet, what’s keeping you? If you need more background about it, here are some recent articles that will enlighten you:

We are right smack-dab in the middle of Life Insurance Awareness Month. It’s a great time to make your clients and prospects aware of the benefits of index universal life.

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