1Q Variable Life Sales Off 55.7% From Last Year

The total premium for second-to-die products issued during the first quarter of 2009 for the companies in the survey was $33.3 million, compared to $87.4 million during the first 3 months of 2008. (This decrease in premiums is comparable to the decline in overall VL sales for the first quarter of 2009.)

The number of second-to-die contracts (including single-premium and flexible-premium products) issued during the first 3 months of 2009 decreased 46% from the same period the year before. The average face amount decreased 8% to $1,965,833.

For the companies reporting sales by distribution channel for the first 3 months of 2009, career agents and independent broker-dealer firms dominated flexible-premium variable life sales, capturing 50% and 37% of the market, respectively.

Independent broker-dealer firms and career agents also dominated second-to-die variable life sales, capturing 65% and 18% of the market, respectively.

As of March 31, 2009, total variable life assets for the companies reporting in VALUE were $86 billion, down 28% from $119.9 billion reported on March 31, 2008. Of the total assets reported, 86% were held in a separate account.

Fixed account interest rates on VL policies are relatively stable. The average one-year interest rate was 4.29% on March 31, 2009, the same rate as on Dec. 31, 2008. The average renewal rate on March 31, 2009 was 4.32%, down very little from 4.33% on Dec. 31, 2008.

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