Sales of new whole life and universal life policies fueled an increase in overall individual life insurance sales in 2010, LIMRA said.
Total annualized premium for all new individual life insurance grew 2 percent in the fourth quarter, resulting in an overall 4 percent increase for 2010, according to the research and consulting firm's "U.S. Individual Life Insurance Sales Survey."
New whole life annualized premium improved 14 percent in the fourth quarter and 15 percent in 2010. The number of policies sold also increased, up 6 percent for the quarter and 2 percent for the year.
New universal life annualized premium increased 13 percent in the last three quarters of the year and rose 10 percent overall for 2010. Policy sales were up 20 percent for the quarter and 21 percent for 2010. LIMRA said the introduction of combination term/universal life products helped boost sales of universal life policies.
Sales of indexed universal life (indexed UL), which ties growth of cash value to a market index, grew by 47 percent in 2010. LIMRA said a variety of factors contributed to the growth of the products, including increased marketing, training and product introductions.
"Indexed universal life sales are also benefiting from the current economic environment. Like other indexed products, indexed UL products' cash value can grow with the market but are also protected against severe market declines," LIMRA Product Research Senior Analyst Ashley Durham said in a media statement.
Term life insurance premiums fell by 16 percent for the quarter and 12 percent for the year, as did term policy sales, the largest annual decline for term on record. Contributing to the decline were companies dropping product lines, such as longer-duration and return-on-premium products, and increasing prices, LIMRA said.