It comes as little surprise that life insurance sales have slowed during 2011, according to LIMRA’s U.S. Individual Life Insurance Sales report.  The downturn in individual life insurance sales is related in part to the exodus of carriers from the no-lapse UL market, says Ashley Durham, senior analyst, product research at LIMRA. “Part of the slowdown in growth is a reflection of a few companies moving away from lifetime death benefit guarantee universal life (UL) products,” she said in a press release.

Universal Life carriers are exiting the lifetime death benefit guarantee UL (“no lapse UL”) market in spite of the product’s popularity. Sun Life, for instance, exited the market in 2010. Where no-lapse universal life represented 97% of its life business in 2007, today it makes up only 32% of its business. Many carriers that are staying in the no-lapse market are raising their rates, increasing the likelihood of no-lapse’s continued decline.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of universal life in Advisor’s Journal, see Can Term Life Coupled with a Mutual Fund Investment Replace a Variable Universal Life Policy? (CC 10-77).

For an in-depth description of variable universal life policies, see AUS Main Library: Section 25 B—Variable Universal Life (VUL).

Tags: Ashley Durham, Financial services, insurance, Insurance policy, life insurance, Term life insurance, United States, Universal life insurance

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