U.S. life insurance sales to individuals dropped 20% in the second quarter as savers shunned investments linked to stocks, contributing to the biggest six-month decline since 1942.

Premium sales fell 23% in the first half, compared with the year-earlier period, trade group Limra International Inc. said Monday in an e-mailed statement.

Life insurers including Lincoln National Corp. and Genworth Financial Inc. have posted losses and profit declines in the past year as investments soured and consumers, pinched by the recession, bought fewer policies and retirement products such as annuities.

Sales of variable life policies, whose value is linked to the performance of stocks or bonds, plummeted 79% in the second quarter, according to Limra.

"There's less money to go around" as savers invest their assets, said Steven Schwartz, an analyst with Raymond James Financial Inc.

"Variable products have been dead before. Historically they've come back as markets come back," he said.

Sales of so-called term life policies, which promise a death benefit if the policyholder does not survive the period outlined in an insurance contract, slipped 3%.

Term life does not expose the policyholder to the equity market risk of variable policies.

The number of policies sold declined 4% in the second quarter, Limra said.

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