“Immediate” annuities are attracting more boomers drawn to lifetime income guaranteed by U.S. life insurance companies. Chris Blunt, executive vice president of retirement income security at New York Life tells Bloomberg a recent big jump in sales is just the “tip of the iceberg.”
“As more baby boomers need to turn assets into income, they’ll choose income annuities to guarantee they can at least cover basic expenses,” he said.
Bloomberg reports sales of immediate annuities rose 30 percent to $8.6 billion in 2008. Immediate annuities pay a periodic fixed amount of money for life in exchange for a lump sum and they start making payments within 13 months from when they’re purchased.