It’s no coincidence that annuity awareness and sales are growing at the same time. Lack of awareness and misinformation have really been the factors keeping people away from annuities despite the fact that annuity benefits match up with personal finance goals. In a recent LifeHealthPro article, “Both annuity awareness, sales growing,” Peggy Bresnick discussed the trend. Although only 22% of Americans are very confident that they will have enough money for a comfortable retirement, that figure has increased 4% in just a couple years. If the current trend of increasing information and knowledge continues, that percentage will hopefully continue to rise so that many more Americans can lose the fear of running out of money in retirement.
This year in June it marked the second annual Annuity Awareness Month, an educational push sponsored by The Coalition for Annuity Awareness. The groups in the coalition focused on providing educational materials and presenting webinars to consumers and advisors alike to help them better understand how annuities can be an important tool in retirement planning. The groups that make up the coalition include Beacon Research, Wink Inc., the Society of Financial Service Professionals (FSP), The Society for Fixed Annuity Facts & Education Inc. (SAFE), the National Association for Fixed Annuities (NAFA), and the National Association for Professional Agents (NAPA). This coalition found that around 1/5 of Americans’ long term savings is in annuity products and life insurance. There are 3.3 million Americans right now holding over $500 billion in annuity premiums. The vast majority of those who own annuities are middle class, have annual household income around $100,000 and hold annuities valued around $90,000. There are currently 75 million Americans who use annuities and other insurance products to provide for their financial future.
Our economy has struggled over the past few decades, making it crucial to have a plan that will keep your finances secure going into retirement. Annuity products provide retirement security to consumers and are being increasingly used to manage longevity risk and market risk. Annuities have the unique benefit of being able to provide guaranteed lifetime income that puts them in a class of their own among other financial product choices.
The more that financial professionals and consumers know about annuity products, it seems the more sales increase. Fixed indexed annuity sales have been at their highest levels ever according to sales data from Wink Inc. Some experts are worried this will change after the DOL fiduciary rule, but others say that the benefits will still make these products just as valuable to consumers. One board member at NAFA said that although there is a small group of consumers who now understand the importance of annuity products in retirement planning, there is still a large group who needs to receive what he calls the annuity message. The coalition has a website filled with a wealth of information about annuity products, including multiple webinars and educational materials for consumers and financial professionals. Annuity sales increase as consumers and professionals receive more information about the benefits and value offered by annuity products.
Written by Rachel Summit