Nearly 9 in 10 buyers of traditional fixed annuities are happy with their purchase, new research reveals.
LIMRA, Windsor, Conn., published this finding in a summary of results from a survey of 1,200 consumers, age 40 or over, who purchased a retail deferred annuity within the past three years. The study was conducted in the third quarter of 2011.
The survey reveals that 86% of traditional fixed annuity buyers are satisfied with their deferred annuity purchase. Likewise, most buyers are variable annuities (75%) and indexed annuities (83%) are also satisfied with the purchases, the survey reveals.
LIMRA Assistant Vice President-Annuity Research Joseph Montminy observes that, of those who are satisfied, two-thirds of the VA households (61% for indexed and half for traditional fixed) own two or more annuities. The study also discloses that five of six deferred annuity buyers would recommend an annuity to their friends or family.
The top reason consumers give for buying an annuity is to supplement their Social Security or pension income, the study notes. The second most popular reason is to accumulate assets for retirement; this is especially true for individuals under age 60.
Receiving guaranteed lifetime income is also a concern, especially for buyers aged 60 and older, the survey says. Annuity buyers’ single most important financial objective is to have enough money to last their and/or their spouse’s lifetime.
Seventy-one percent of VA buyers say the financial strength of the company is very important when purchasing an annuity; 68% of indexed and traditional fixed annuity buyers also place a company’s financial strength at that level of importance.