Fixed annuity sales climbed 79% in the fourth quarter to end 2008 at $109.4 billion for the year, overcoming a slump in variable annuity sales and keeping overall annuity sales growth positive, according to LIMRA International.

Meanwhile, life insurance sales ended the year down 7%, reports LIMRA, Windsor, Conn.

VA sales followed the downward trend of the equity market, said Joe Montminy, research director of annuity research for LIMRA, Windsor, Conn. “It’s encouraging that consumers are turning to fixed annuities for their retirement income needs, and as a result, overall individual annuity sales posted a 2% gain, reaching $265 billion in 2008,” Montminy said.

VA sales dropped 30% in the fourth quarter from the same period of 2007. Total 2008 sales of VAs fell by 15% from the year before, to $155.6 billion.

Sales increased for all fixed deferred annuity product types in 2008, lead by a 135% increase in market-value-adjusted products. Sales of book-value products, the largest fixed annuity product type, grew 84%. Indexed annuity sales increased 6%.

Immediate fixed annuity sales, while small in total, increased 23% in 2008, fueled by growing numbers of retirees seeking guaranteed lifetime income, LIMRA said.

For individual life insurance, new annualized premium dropped 14% in the fourth quarter, ending 2008 with an overall 7% decline, according to LIMRA.

The fourth quarter saw the sharpest drop in life insurance premium since the fourth quarter of 1951, LIMRA reported. The overall decline for the year erased a 7% gain in 2007 and was the largest 1-year decline in LIMRA’s records. The last significant annual decline was in 1991, coming off a mild recession, when premium fell 5%, according to the report.

Bucking the trend was whole life, which showed a 2% growth in premiums in 2008, following a third-quarter surge of 7% and a 2% increase in the fourth quarter, LIMRA reports.

Universal life sales fell 23% in the fourth quarter. Variable universal life dropped 18% in the quarter and finished the year down 17%. Nearly 90% of UL writers suffered declines, most in double-digits, according to the report.

Term life premium was down 3% for the quarter and 2% overall in 2008. Almost 60% of term writers saw declines in 2008, with 30% experiencing double-digit declines, LIMRA said.