In “Consumers’ Interest in Guaranteed Living Benefits Remains Strong in 2009, LIMRA Reports” from Insurance News Net, LIMRA’s 4th quarter findings are detailed. When variable annuities offer the Guaranteed Living Benefit (GLB) rider, 84% of people elected to get the rider in the 4th quarter of 2009. The four quarters prior to last, 89% of people elected for the GLBs. The small decline is associated with a similar decline in the guaranteed living withdrawal benefit rider (GLWB), although the market share for GLWBs was still high.
LIMRA believes that the high number of investors opting for the security of the GLB is directly related to the shaky economy. Even though insurance companies are trying to decrease the attractiveness of these low-risk riders, 80% of variable annuity contracts last year elected a GLB. From the beginning of 2009 to the end, sales of variable annuities with GLBs attached increased by 41%, while total variable annuity assets increased by 21%. New investors’ high rate of election of the GLB rider accounts for the larger increase of products with GLBs. Many older annuities do not have the rider and are past the point of having a surrender charge so may leave the market.