{"id":8999,"date":"2015-03-23T19:44:34","date_gmt":"2015-03-23T19:44:34","guid":{"rendered":"http:\/\/www.annuityfyi.com\/?p=8999"},"modified":"2023-02-14T21:46:55","modified_gmt":"2023-02-14T21:46:55","slug":"new-deferred-income-annuity-offers-flexible-pay-option","status":"publish","type":"post","link":"https:\/\/www.annuityfyi.com\/blog\/2015\/03\/new-deferred-income-annuity-offers-flexible-pay-option\/","title":{"rendered":"New Deferred Income Annuity Offers Flexible Pay Option"},"content":{"rendered":"

\"\"As deferred income annuities become increasingly popular, some insurance companies are making modifications that will peak the interest of a broader range of consumers.  In Insurance News Net’s “Carrier Aims Annuity At Younger Buyers<\/a>,” Cyril Tuohy says that First Investor’s Life has introduced a flexible pay deferred income annuity that will attract younger buyers.  These particular annuity products have been on fire lately and are setting sales records in their product category.  While they still represent only a small portion of total annuity sales, deferred income annuities are becoming increasing important in the annuity industry.<\/p>\n

Last year, First Investor’s Life introduced a new DIA that only allows for a single premium payment.  Now they have introduced a DIA that gives investors a flexible pay option.  The company said that they saw a much greater demand for their deferred income annuity product than they had anticipated.  They admitted that they had underestimated the general public’s desire for guarantees.  People want to receive income guarantees from their money and feel content knowing that their money is safe with a deferred income annuity.  With this flexible pay DIA, investors can put money into the product in smaller increments over a longer period of time.  If they need to stop making payments for a period of time because they are buying a home or have an unexpected medical cost, they can stop and then start making payments again at some point in the future.<\/p>\n

Some of the past objections to deferred income annuities were that they tied up your money for a long time and that you lost out if you died sooner than your life expectancy dictated.  First Investor’s Life says that they are still determining why their deferred income annuities caught on so well, but they believe that consumers are simply looking for a way to secure a future income stream.  Deferred income annuity sales were more than $2 billion last year for the first time ever.  These annuities had the largest overall increase within the entire fixed annuity market.  LIMRA SRI’s assistant vice president said that the organization expects deferred income annuity sales to more than double by 2018.  He attributes this forecasted increase to increasing interest rates and the consumer need to create your own type of pension<\/a> in retirement.  The average deferred income annuity contract in 2013 was $137,000.<\/p>\n

Treasury Department rulings last year made it easier to use deferred income annuities within 401k plans and IRAs.  DIAs have often been targeted to Americans who are retiring, but are now more appealing to younger investors who still have time to work.  The government is trying to make it easier for Americans to create their own pension plans as fewer companies offer that type of retirement benefit anymore.  Annuities are one of the only ways for people to guarantee a lifetime income stream, so annuity companies are working hard to make their products meet the demands of the consumers that they can help.  There are many options available for deferred income annuity payment schedules, so they appeal to younger investors as well as older workers without a retirement plan.  Flexible payment options make it even easier for people to purchase a DIA because they can stop payments or put a large yearly bonus into their premium total whenever the time is right for them.  As these annuities continue to increase in popularity, look for even more enhancements and options to come about.<\/p>\n

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Written by Rachel Summit<\/a><\/p>\n

Follow Rachel, aka Finance Mama, on Twitter<\/a> and Google+<\/a><\/p>\n<\/div>\n<\/div>\n