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.
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.