Consumers who buy fixed annuities still seem to be expecting an increase in interest rates.[@@]
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 quarterly fixed annuity market survey conducted by Beacon Research Publications Inc., Evanston, Ill.
The firm bases the survey report on data for 208 U.S. fixed annuity products from 47 manufacturers.
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Annuities with 1-year guarantee periods accounted for 85% of sales of “book value” fixed annuities during the first quarter, up from 82% during the first quarter of 2004, Beacon says.