Déjà VUL

by LifeTrends Alumni

Déjà vu all over again?

Picture this – the housing market is soaring, and the markets have been steadily increasing for years. While your first thought may be the present day, it also harkens back to the 1990s when there were very similar conditions. A sustained ‘bull market’ in the 1990s provided great conditions for a relatively new product to be introduced to the life insurance landscape, Variable Universal Life (VUL), which allowed policy owners to take advantage of significant growth in the market.

Fast forward to present day and we are seeing another steady bull market growth. In addition to similar market conditions as the 1990s, other factors including a sustained low interest rate environment and increased regulations imposed on Indexed Universal Life (IUL) policies, have led to VUL seeing a resurgence in sales, both in the Accumulation and Protection spaces.

How We Arrived Here

After the strong bull run in the late 90s, there were some significant ‘market corrections’ in the U.S. Economy, most notably in 2001 and 2008 that each led to bear markets. The general tendency for consumers was to pull back from market risk and look towards safer & more secure options for life insurance protection, forgoing the potential for a high return. This led to growth in the Guaranteed Protection market, most notably in the

Guaranteed Universal Life (GUL) segment. Similarly, IUL policies saw significant growth with their ability to mimic market growth, but with the added protection of a floor that is not present in traditional VUL policies.

Over the last six years, however, the landscape for fixed products has changed dramatically. IUL products have had two significant regulations imposed on the illustrative performance. Furthermore, GUL products have also experienced a significant transformation. Hampered by low interest rates, many carriers have had to implement substantial price increases on their GUL products, or in some cases, pull them from the market entirely.

What the Sales Tell Us

All the changes are helpful, but are they leading to more sales of VUL? The short answer is a resounding, Yes. LIMRA1 recently released Life Insurance Sales numbers through the first quarter of 2021. VUL Sales showed an increase of 54% compared to the first quarter of 2020, with nine of the top ten writers of VUL having an average of 85% increase in new premium.

LifeTrends Benchmarking

LifeTrends is also staying up to date with this growing market segment. The most significant example of this is the increased number of benchmarks for Accumulation focused VUL Products and data that LifeTrends recently released. The complete listing of VUL Benchmarks & Data are:

  • Endow 6%
  • NEW – Endow 7%
  • Endow 8%
  • Maximum Distributions 6%, Pay to Retirement
  • NEW – Maximum Distributions 6%, 5-Pay and 10-Pay
  • NEW – Maximum Distributions 7%, Pay to Retirement, 5-Pay and 10-Pay
  • Maximum Distributions 8%, Pay to Retirement
  • NEW – Maximum Distributions 8%, 5-Pay and 10-Pay
  • NEW – Internal Rate of Return (IRR) Columns (All VUL Products/Solves)


While overall Life Insurance premium and policy counts both rose in 2021 compared to 2020, VUL had the largest amount of growth in each category, compared to Whole Life, Term and Universal Life. Some of the contributing factors are the items we outlined: increased regulation on IUL products and a sustained low interest rate environment. LifeTrends will continue to track this information and always provide current and relevant benchmarks and data to assist our partners.

1 LIMRA Releases 2021 First Quarter Life Insurance Sales