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Life Health > Annuities > Fixed Annuities

Fixed Annuity Buyers Still Choosing 1-Year Guarantees

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NU Online News Service, March 31, 2005, 3:58 p.m. EST

Consumers continue to try to keep their powder dry.[@@]

A few years ago, when interest rates seemed to be in a permanent state of decline, many purchasers of fixed annuities wanted to lock in multi-year rate guarantees.

Now that rates are rising, shorter guarantee periods are in fashion, according to a report on a new quarterly fixed annuity market survey conducted by Beacon Research Publications Inc., Evanston, Ill.

The firm collects data on 193 U.S. fixed annuity products from 46 manufacturers.

Annuities with 1-year guarantee periods accounted for 83% of ordinary fixed annuity sales during the fourth quarter of 2004, up from 82% during the second quarter, Beacon says.

In the index annuity market, products with shorter guarantee periods also gained in popularity, Beacon says.


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