There was a sharp increase in the number of life insurance policies sold in the first quarter of 2010 when compared with the same time period in 2009. And now the second quarter of 2010 has posted another strong increase. Compared with the second quarter of 2009, annualized premiums for individual life insurance policies were up 7% in the second quarter of this year.
Whole life, universal life, and variable universal life are all being purchased more this year than last year. But term life insurance did not show gains; annualized premiums for term policies dropped 11% in the second quarter of 2010. I find this interesting, given that term life insurance tends to be the most appropriate choice for the majority of the population that needs to secure death benefits.
It’s possible that the slowly-rebounding economy is responsible for the shift from term to permanent life insurance products, and for the overall upswing in total annualized premiums. For the last couple years, the recession has meant that most of the country has been tightening their budgets. Term life insurance policies are a lot less expensive than permanent policies, so for people who needed to buy life insurance during the recession, term products were likely more popular. But now that the economy is showing signs of recovering, people may be more apt to purchase higher-cost permanent life insurance policies that grow cash value or include an investment component. It will be interesting to see how the numbers play out for the rest of 2010… will term life insurance policy sales bounce back, or will the growth of permanent policies continue?