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Strong Universal Life Interest Pushes Up MIB Application Activity

By Allison Bell

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What You Need to Know

  • Overall application flow is up.
  • Flow is up for younger people and down for older people.
  • For the first quarter, activity is up for all types of products that MIB tracks, but up more for universal life policies.

Strong interest in universal life insurance continued to drive U.S. individual life application activity higher in March, according to new MIB Group data.

MIB is a Braintree, Massachusetts-based group that helps insurers share some of the data used in application underwriting. It bases its monthly activity reports on its own underwriting system activity levels.

MIB application flow was 3.3% higher in March than in March 2022.

MIB shows flow numbers for three major product categories. Universal life application flow soared 21% year-over-year in February, and it increased 15% year-over-year in the first quarter. Application flow increased 5.4% in the first quarter, and whole life application flow increased 3.2%.

What It Means

The popularity of universal life sales may be a sign that clients are facing more than the usual level of tension between fear and optimism.

Universal Life

Life insurers can build universal life policies with adjustable premiums and adjustable benefits levels.

Indexed universal life policies help life insurers use derivatives to hold down investment menu management costs and to increase the death benefits when investment markets do well.

Variable universal life policies tie policy performance to investment market performance without necessarily offering firm, built-in benefits guarantees.

Life insurance market data collected by LIMRA, a financial services research group, suggest that the number of indexed universal life sales sold jumped 15% in the fourth quarter of 2022, while the number of fixed universal life policies and variable universal policies fell sharply.

Combined, the MIB and LIMRA numbers suggest that much of the recent life market growth may be coming from indexed universal policies — or policies designed for clients who fear market losses and also have a fear of missing out on the next boom.

Activity by Age

Here are the activity change figures, for March, for applicants in five different age groups:

  • Ages zero-30: +5.3%
  • Ages 31-50: +6.5%
  • Ages 51-60: -1.1%
  • Ages 61-70: -3.0%
  • Ages 71 and older: 0%

The Policygenius Price Index

A web broker, Policygenius, uses its own sales data to post a monthly term life price index.

The prices in the index tables range from the average monthly premiums for a 25-year-old female nonsmoker who needs $250,000 in death benefits up to the average monthly premiums for a 55-year-old male smoker who needs $1 million in death benefits.

This month, the cost for the 25-year-old female nonsmoker seeking $250,000 in coverage increased 1% from the average for March 2022, to $14.39.

The cost for the 55-year-old male smoker seeking $1 million in coverage, fell 1.2%, to $1,006.87.

(Image: Shutterstock)

Allison Bell

Think_Allison

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