Total U.S. individual variable annuity sales climbed to $46 billion in the third quarter, up 23% from the total for the third quarter of 2006, according to LIMRA International.

Fixed annuity sales fell 10%, to $19 billion.

The current instability of the stock market and the widening gap between short-term and long-term interest rates on the fixed annuity side are creating a favorable selling environment for variable annuities, says Dan Beatrice, an analyst at LIMRA, Windsor, Conn.

Fixed annuity sales may be down for the year, but fourth-quarter FA sales should be strong, and “variable annuity sales are near certain to come in at record levels for 2007,” Beatrice says.

Annuity sales include deferred and immediate annuities.

Immediate annuities are popular with retirees who are converting nest eggs into streams of income.

Sales of variable immediate annuities are down, but sales of fixed immediate annuities increased 6%, to $1.7 billion.