Life insurance purchases down fourth straight month

Applications for life insurance dipped in November, the fourth time in as many months.

The year gone by is turning out to be a tale of two halves, as life insurance purchasing was  fast and furious through the initial six months, but turned slow and low by late summer. And in the penultimate month of 2016, the downward trend continued, according to the results of recent analysis.

Individually underwritten life insurance policy purchases fell a fourth consecutive month in November, this time diminishing 3.3 percent from the same period in 2015, MIB Life Index revealed from its latest data. That's the biggest year-over-year reduction for the entire calendar year and far removed from the beginning of 2016, when purchases soared nearly 6.5 percent.

"Purchases fell in every age group during November."

Applications down across the board
Proving to be the difference maker was the lack of buys among millennials and the younger members of Generation X. Specifically, application volume for adults under the age of 44 slipped 4 percent from 12 months prior, MIB Life revealed, and 3.3 percent for those between 45 and 59. Even for the 60 and older crowd, purchase activity decreased, down roughly 1 percent. On only one other occasion in 2016, life insurance application volume diminished across all age groups, the last time happening in September, down 2.6 percent, 2.8 percent and 0.7 percent, respectively.

There's still one more month to log before closing the books on 2016 to see if it was a net positive or negative year, but as of right now, life insurance buying is in the black. Compared to the equivalent 11-month period in 2015, applications are up 1.7 percent. This largely due to the substantial growth that took place during the first three months of the year.

"[We've seen] eight consecutive months quarters of growth for the life insurance industry as measured by the MIB Life Index - that's a record," said Stacy Gill, the Braintree, Mass.-based firm's executive vice president in a web video blog in July.

Whole, term still robust 
Furthermore, several varieties of life insurance have seen increased buying volume. Ashley Durham, LIMRA Insurance Research associate research director, noted that whole life sales have risen annually for 10 years running. Term life has also maintained its strength, logging eight quarters in a row of growth. How term life performs is both telling and significant, given that it represents a sizeable portion of the life insurance market.

"30 percent of households don't have life insurance."

As it always does, time will tell how life insurance activity plays out over the course of 2017. Outside of the recent developments, agents have a lot to be encouraged about. For instance, fewer Americans are uninsured, totaling 3.7 million fewer households with children 18 years of age or under in 2016 than in 2010, according to separate analysis conducted by LIMRA. Furthermore, around 5 million additional families have coverage in the six-year span.

Insurance professionals still have their work cut out for them though, because life insurance penetration isn't nearly as far reaching as other products, like health insurance and auto insurance, both of which are required to own by law. It's believed that 30 percent of U.S. adults don't have life insurance, according to LIMRA's best estimates.

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