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Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Annuity Sales Grew 7.7 Percent in 2011

2011 annuity sales are back to 2007 levels. Are the products right for you?

| BY Adriana Reyneri


Annuity sales grew nearly 8 percent in 2011 – a 28 percent increase over 2010 – despite quarterly declines in sales, according to a new report from the Insured Retirement Institute, or IRI.

Net variable annuity sales topped $27.7 billion, for the strongest showing since 2007, though total sales declined from quarter to quarter, according to the IRI, a non-profit industry association based in Washington, D.C.

“These sales results demonstrate that the marketplace for insured retirement products is truly robust with a significant number of investors looking to attain a lifetime income as part of their retirement strategy,” said Cathy Weatherford, president and chief executive officer for IRI, in a prepared statement.

Fixed annuity sales showed “resiliency” in a low interest rate climate by falling only 1.1 percent from 2010 to $75.6 billion, said the IRI. A fourth-quarter dip of 8.8 percent contributed to the drop in sales.

“Considering the interest rate decline, fixed annuity sales have proven quite resilient due to the need for guaranteed income,” said Jeremy Alexander, president of Beacon Research, an independent research company tracking the annuity market.

A fixed annuity is a type of insurance product designed to provide long-term, tax-deferred savings, according to the non-profit AARP, an advocacy group for the nation’s senior citizens. Earnings are taxed upon withdrawal, and investors may invest as much as they like regardless of wealth level. AARP explains, “A fixed annuity could be a good option if you wish to increase your tax-deferred savings.”

A variable annuity is also a tax-deferred insurance product but – as the name implies – yields can vary with the performance of the underlying investments, typically stock, bond or money market subaccounts. Variable annuities can also be sold with insurance riders that provide guaranteed income for life, explains the Financial Industry Regulatory Authority, or FINRA, a self-governing industry association.

The terms and conditions of annuities vary significantly, and can be difficult to understand, say advocates who urge investors to carefully research the products, which are illiquid and tend to have high fees and sales commissions. A greater share of the high net worth investors surveyed in Millionaire Corner’s ongoing wealth studies reported owning annuities in December 2011, compared to the same period in 2010. Thirty percent of individuals with investable assets between $5 million and $25 million reported owning variable annuities at the end of 2011, compared to 26 percent for the year before. Ownership of fixed annuity products stands at 25 percent, up from 23 percent last year.