Policies with secondary guarantees accounted for 64% of UL sales
Universal life insurance policies with long-term care riders may have accounted for 24% of premiums from new U.S. UL sales in 2016, according to analysts at Milliman
The percentage of UL sales premiums going to policies that offer long-term care benefits increased from 22.3% in 2015, and from 16.4% in 2013.
In the market for UL policies with secondary guarantees, the share of premiums going to policies with long-term care riders increased to 33.5% in 2016. That’s up from 31.9% in 2015, and up from 24% in 2013.
Carl Friedrich and Susan Saip have published those figures in Milliman’s latest UL market survey report.
Milliman began the survey in October 2016 and received 32 responses.
The figures for 2016 were for the first three quarters of 2016.
The participating insurers generated $1 billion in UL sales in 2015, up from $924 million in sales in 2015.
Sales for the first three quarters of 2016 amounted to $735 million.
Sales of universal life policies with secondary guarantees accounted for 64% of UL sales in the first three quarters of 2016, up from 62% in 2015.
A universal life policy is a flexible-premium, flexible-benefit life policy designed in such a way that interest earnings on premium payments can increase the cash value of the policy.
A UL policy with a secondary guarantee is a UL policy with a feature that can keep the policy from lapsing, even if the cash value falls to zero, once the holder has made a minimum number of premium payments.
A spokesperson from Robert J Russell Companies said that they sell 100% term insurance the first year then typically about 79% of those term policyholders will convert to a UL the second year.