Indexed Life Sales Creep Higher: Wink
About 80% of the buyers are using the policies mainly to accumulate cash, according to third-quarter data.
Consumers were making a little more use of indexed life insurance in the third quarter.
Total U.S. sales of individual indexed life insurance increased 2.5% between the third quarter of 2022 and the third quarter of 2023, to $687 million, according to Wink.
The percentage of buyers using the policies mainly to accumulate cash increased to 79%, from 78%.
Wink is a Des Moines, Iowa-based firm that that uses an issuer survey to producer its life sales data. The participating issuers account for about 93% of individual indexed life sales.
What it means: Some clients may be using indexed life insurance to build up cash for retirement, paying for their children’s education or other purposes.
The number of people using indexed life insurance that way seems to be holding steady.
Indexed life insurance: The issuer of an indexed life insurance policy offers a fixed minimum level of permanent coverage that has a built-in cash value account.
The issuer provides an opportunity for value increases tied to the performance of one or more investment indexes.
The indexed life market: Wink found that independent agents account for about 79% of the participating issuers’ indexed life sales.
At issuers that answered questions about index use, about half of sales are to consumers who tie policy growth to the S&P 500 index.
The percentage of sales linked to the Russell 2000 increased to 0.2%, from 0.1%, and the percentage linked to the S&P Midcap 400 increased to 0.2%, from 0.1%.
The average issue age was 43.
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