New U.S. life insurance premium payments reached $15.3 billion last year, matching the record set in the preceding year, according to Windsor, Conn.-based data tracker LIMRA.
This was despite a slowdown in the second half of the year, LIMRA Senior Vice President John Carroll said in a press release.
He attributed the second half's sales declines to "worries about inflation and the economy." The Covid pandemic played a role, too, he said.
In 2021, the pandemic drove record sales—which carried over into the first half of 2022. That was enough to offset a weaker second half of 2022, he said, and keep total sales for 2022 tied with the previous year's record high.
“Inflation and economic uncertainty have an outsized impact on middle-income consumers,” said Carroll. “Our research shows one in 10 middle-income consumers said they have put off buying or said they would put off buying needed insurance due to worsening economic conditions.”
More than 100 million Americans acknowledge living with an insurance-coverage gap, reported the data tracker. It forecasts life insurance sales growth will remain unchanged through 2024.
Breaking the numbers down: total premiums for new whole life policies, which provide permanent life insurance with a cash value, fell in 2022 year-over-year to $5.8 billion, or 38% of the total market.
New term-policy premiums, which are less expensive and only provide a death benefit if the person dies before the designated term is up, also fell 5% last year compared to the year before, coming in at $2.8 billion or 19% of the market.
Premiums for new fixed universal life policies, which are permanent policies with flexible premiums and a cash value that earns a fixed rate of interest, also fell in 2022. They totaled $1.1 billion for the year, a decline of 17% from the preceding year, representing only a 7% share of the total market.
But variable universal life sales increased, with new premiums for the year amounting to $1.8 billion, 8% more than a year before. That represents 11% of the life insurance market. These plans, which also have flexible premiums, give the option of investing the cash value in a separate market-based account.
And indexed universal life, which have flexible premiums and allow the cash value to be pegged to an equity index, enjoyed a 13% year-over-year jump in new premiums, bringing in $3.9 billion, or one quarter of the total individual life influence market in 2022.
Carroll said the phenomenal growth in sales of variable and indexed universal life products was largely due to "remarkable equity market growth in 2021."
But as equity markets faltered, and pandemic fear lessened, "the impetus to purchase life insurance may have become less urgent," he acknowledged, adding, "It is critical for our industry to continue to highlight the important role life insurance plays in a family’s overall financial security and find innovative ways to help consumers get the coverage they need.”