New premiums on life insurance stayed stable in Q2 2024, says Limra

investmentnews.com:

The US individual life insurance market has stayed stable in the second quarter, though that topline figure obscures a possible shift in consumer appetites amid interest rate challenges, according to new data from Limra.

Sharing preliminary results from its latest US Life Insurance Sales survey, Limra said total new annualized premium reached $3.97 billion during the second quarter of 2024 which was level with the same period last year. Policy count also didn’t budge compared to the same time a year ago.

By the first half of 2024, new premium totaled $7.7 billion, down 1 percent year over year, while the number of policies sold remained stable.

“Whole life sales, which represent the largest proportion of the U.S. life insurance market, have struggled under a higher interest rate environment in the first half of 2024,” Karen Terry, assistant vice president and head of Limra’s Insurance Product Research, noted in a statement sharing the results Tuesday.

Limra says sales in whole life insurance as a category have softened in the face of interest rates, with buyers turning away from high-face or short-pay life insurance in favor of other products that hold at least some promise of a stronger return.

Whole life new premium fell 7 percent in the second quarter to $1.46 billion, with policy count dropping 6 percent. Year-to-date, whole life premium decreased by 7 percent, reaching $2.92 billion – accounting for 38 percent of total new annualized premium sold in the first half – and policy count was down 5 percent.

“If the Federal Reserve reduces interest rates in the fall, LIMRA expects whole life sales to rebound in the second half of the year,” Terry said.

Term life insurance seems to have done better, with new premium