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Big shift from universal life to IUL underway, Milliman finds

Insurance Forums Staff

Total individual universal life insurance sales decreased 31% between 2017 and late 2019 , while indexed universal life (IUL) sales increased 16% during the same time period, according to a new study by Milliman.

The global consulting and actuarial firm, recently released the results of its 13th annual comprehensive study of universal life (UL) and indexed universal life (IUL) issues.

The report, “Universal Life and Indexed Universal Life Issues,” is based on a survey of 30 UL/IUL companies, focused on current topics relative to a range of UL and IUL product types.

Other key findings of the study include:

  • IUL sales during YTD 9/30/19 accounted for 63% of total UL/IUL sales combined (reported by survey participants), increasing from the 50% of total sales it represented in 2017.
  • Sales of combination riders on UL/IUL products continue to be strong. During YTD 9/30/19, sales of chronic illness riders as a percent of total sales were 11.4% for UL products and 37.3% for IUL products. During the same period, sales of policies with long-term care (LTC) riders as a percent of total sales were 54.6% for UL products and 14.7% for IUL products. Within 24 months, 90% of survey participants possibly will market either an LTC or chronic illness rider.
  • Of the 30 respondents, full underwriting of UL/IUL products is used by 29 participants, accelerated underwriting by 16 participants, and simplified issue underwriting by 11 participants. Of the 14 survey participants that do not currently have an accelerated underwriting program, eight indicated they plan to implement one in the next 12 months.
  • The number of survey participants (27) that have repriced or redesigned at least one UL/IUL product under the 2017 CSO Mortality Tables was significantly higher than in our prior UL/IUL survey (14), published in June 2019. The two most common products that were repriced or redesigned are ULSG and cash accumulation IUL.

The 283-page “Universal Life and Indexed Universal Life Issues – Detailed Report” includes detailed information on product and actuarial issues, such as sales, profit measures, target surplus, reserves, risk management, underwriting, product design, compensation, pricing, and illustrations.

It is available for purchase by visiting the Milliman website at https://www.milliman.com/en/insight/Universal-life-and-indexed-universal-life-issues-2019-2020-survey. Companies participating in the study receive a complimentary copy of the detailed report, as well as individual company responses reported on an anonymous basis.

For further information, visit www.milliman.com.



1 thought on “Big shift from universal life to IUL underway, Milliman finds”

  1. This survey is somewhat misleading, actually it is quite misleading.
    The amount of insurers that provide GUL to age 121 is probably less than half of what it used to be.
    Carriers have repriced there IUL so the guarantee at a given price is the same as a UL.
    That being the case why not go for a little upside.
    The shift to IUL is not so much a change in buyers mentality as it is in the cancellation of old products and the repricing of new products.
    This is what is changing clients decisions.
    More meaningful data and it may be in your survey would be to break this down by age.
    Somebody looking to put a policy in a trust to protect his estate and estate tax liability do not need an IUL unless the stronger guarantees are no longer available.
    I would not consider that a shift in attitudes towards IUL.

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