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Immediate Annuities Are Selling

Sales of immediate annuities and fixed indexed annuities increased in 2010, according to National Underwriter’s Allison Bell.  The article “Annuity Data: Fixed Annuities; Variable Annuity Guaranteed Living Benefits” summarizes the information collected by Beacon Research Publications Inc.  Fixed annuity sales decreased 31% from 2009 to 2010, but were still $72 billion.  It doesn’t necessarily mean that people are buying fewer annuities though.

Many investors decided to purchase fixed indexed annuities or variable annuities instead of fixed annuities because of low annuity rates.  Indexed annuity sales were up 6% in 2010, for a total of $31 billion.  Investors like the lower risk indexed annuity because they get some guarantees along with exposure to the market at little to no risk.  There were $8 billion of income annuities sold in 2010, a 2% increase from 2009.

LIMRA conducted a survey in the insurance industry and found out that investors purchasing variable annuities are more likely than ever to add guaranteed living benefit riders to their annuities.  In the fourth quarter of 2010, 87% of investors added a GLB to their variable annuities.  This was an increase from 2009 when 84% of investors added the riders.  Total variable annuity assets that include GLBs went up to $521 billion in the fourth quarter of 2010, nearly doubling the total from just two years prior.

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