With more companies shifting to introduce recurring premium options, total new premium for individual life combination products dropped 2% to $4.3 billion in 2018, after three consecutive years of growth, according to LIMRA’s 2018 Individual Life Combination Products Annual Review.
A total of 404,000 policies were sold in 2018, a 2% increase, compared with 2017 results.
In 2018, combination products represented 27% of the overall U.S. individual life insurance market. Life combination products provide life insurance coverage with long-term care or chronic illness coverage, an attractive value proposition to consumers, according to LIMRA consumer research.
Daniel McAllen, associate analyst, LIMRA Insurance Research, noted that 61% of policies were sold on a recurring premium basis in 2011. That percentage jumped to 93 in 2018. “This shift suggests a growing movement to attract mass-affluent buyers who may not have the financial wherewithal to invest a large lump sum all at once but still want the dual protection these products offer,” he said.
According to LIMRA, whole life combination premium experienced the largest growth, on a product level, in 2018, up 34%, compared with 2017 results. Whole life also held 27 percent of the combination market in 2018, up 7 percentage points from 2017. Variable universal life combination premium also improved, growing 5% in 2018. Its market share remained steady at 5%.
On the other hand, long-term care (LTC) acceleration riders and LTC extension products equally held 41% of the premium market share in 2018. Chronic illness (CI) acceleration riders held the remaining 18% of the market by premium but continued to hold the largest portion of policies at 64%.