2Q Variable Life Sales Zoomed 20.3% Over Last Year

The total premium for second-to-die products issued during the first 6 months of 2007 for the companies in the survey was $168 million, compared to $128 million during the first 6 months of 2006.

The number of second-to-die contracts (including single-premium and flexible-premium products) issued during the first 6 months of 2007 increased 13% over the same period the year before. The average face amount decreased 3% to $2,332,220.

For the companies reporting sales by distribution channel for the first half of 2007, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 45% and 36% of the market, respectively.

Independent broker-dealer firms and career agents also dominated second-to-die variable life sales, capturing 40% and 38% of the market, respectively.

As of June 30, 2007, total variable life assets for the companies reporting in VALUE were $121 billion, up 7% from $113 billion reported on June 30, 2006. Of the total assets reported, 93% were held in a separate account.

VALUE classes funds into the following categories: growth, aggressive growth, growth and income, international stock, government bond, corporate bond, high-yield bond, international bond, money market, balanced and specialty (e.g., gold, real estate).

As of June 30, 2007, approximately 80% of the variable life separate account assets were in stock funds; 9%, bond funds; 3%, money market funds; 6%, balanced funds; and 2%, specialty funds.

Fixed account interest rates on VL policies are relatively stable. The average 1-year interest rate decreased from 4.24% on March 31, 2007 to 4.23% on June 30, 2007. The average renewal rate on June 30, 2007 was 4.28%, down from 4.29% on March 31, 2007.

Leah Wolf is with Towers Perrin, of which Tillinghast is a business. She can be reached at .