Variable annuities (VAs) carrying a guaranteed living benefit rider generated $20.3 billion of new deferred VA premium in the second quarter of 2010, an 18% increase over the first quarter, according to a new study.
For the third consecutive quarter, guaranteed living benefits (GLBs) were elected 87% of the time when any GLB was available for purchase, according to the study by LIMRA, Windsor, Conn.
The guaranteed lifetime withdrawal benefit election rate remained at 64%. Guaranteed minimum income benefit riders were elected 17% of the time. The guaranteed minimum accumulation benefit and guaranteed minimum withdrawal each had a 3% election rate in the second quarter.
LIMRA estimates that GLBs were available in contracts generating $23.2 billion of new deferred VA premium during the quarter.
But VA assets with a GLB rider fell 3% to $427 billion at the end of the quarter from $440 billion in the first quarter. Total VA assets dropped 5% to $1.36 trillion from $1.43 trillion during the same period.
LIMRA, Windsor, Conn., surveyed 27 carriers represented 95% of second quarter industry sales.