More than half of financial advisors think that annuity products are important in the investment plans of their middle income clients. LIMRA just performed a study detailing this and other findings, the results of which are written in Banker & Tradesman’s “Most advisors approve of annuity products for clients, LIMRA study finds.” Those clients with less than $500,000 to invest are considered middle income and have the largest risk of outliving their savings in retirement. When LIMRA did this study in 2009, they found that 40% of advisors thought annuity products were right for their clients. That number has increased substantially this year to 56% of advisors believing annuities are right for their middle income clients.
Longevity risk is one of the biggest fears that advisors have for their clients. Those with less than $500,000 have to live off of their savings and really cannot self-insure. Finding the best annuities is an important insurance against longevity risk for these clients. Even when it comes to wealthier clients, 42% of advisors still believe that annuity products are important in their portfolios. LIMRA’s research found that 60% of advisors’ clients favorably view annuities and other guaranteed income investments. As insurance companies continue to make better annuity products and spread the word about the best annuity benefits, it is likely that more than 56% of advisors will favor annuities during LIMRA’s next study.
Written by Rachel Summit
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