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Sales of Immediate Annuities Soar for New York Life

Matt Ackerman of Bank Investment Consultant recently reported that sales of immediate annuities have risen over the past several years. For example, New York Life’s immediate annuity sales increased by 34% in 2008. As of December 31st, immediate annuities make up $1.2 billion in the firm’s assets.

While immediate annuities have been around for decades, New York Life only resumed its marketing of them a few years ago. These products, which turn an investor’s lump sum into an steady income stream for retirement, have surged in popularity due to changing demographics; Matt says that since the U.S. population is aging, individuals are becoming more worried about outliving their savings instead of growing their nest egg. 

Immediate annuities are normally safer for consumers than variable annuities, because their initial investment is typically guaranteed. The only risk they pose to insurers is an individual’s life expectancy. Unlike variable annuities, they won’t suffer heavy fluctuations in value. Economic troubles are another reason that the sales of immediate annuities from New York Life have increased ten-fold in just five years!

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