Financial advisors whose clients hold annuities haven’t had to worry about fielding concerned investors’ calls in this tumultuous market. According to The Wall Street Journal article “Annuities Provide Safety, At a Price,” author Russell Pearlman says that annuity sales have been increasing due to the difficulty in the financial markets. Annuity sales went down in 2008, 2009, and 2010; but are expected to increase in 2011. With the increasing interest in the best annuities on the market, companies like Hartford and New York Life are introducing new and improved products to meet investor demands. But they have often seen an increase in annuity sales before they can even get their new products on the market. New York Life’s main fixed immediate annuity has seen a sales increase of 62% since last year at this time.
Both fixed annuities, which guarantee you a specific rate of return, and variable annuities, in which your rate of return varies while you receive tax benefits, have seen an increase in sales. For an added fee, you can guarantee that you will receive payments over your lifetime even in a declining stock market. You can also opt for a death benefit annuity where your payments will continue going to your heirs after your death. Principal Financial Group says that now is a great time for an annuity if you want to maintain exposure in the markets while guaranteeing a specific income level. The article points out the importance of speaking with an expert and knowing all the complexities involved before purchasing an annuity. They take a lot of risk out of investing so many investors are sleeping soundly at night knowing that they have a guaranteed stream of income.
Written by Rachel Summit