As variable annuity sales (VA) rise, so, too, are those of indexed annuities (IA). According to a third-quarter report from AnnuitySpecs.com, total IA sales hit $8.7 billion, up more than 5 percent from the previous quarter. Compared to the same period in 2010, sales decreased by less than 1 percent.
Sheryl J. Moore, president and CEO of Des Moines, Iowa-based AnnuitySpecs.com, noted that this was second highest quarter for IA sales and that indexed annuities now account for one out of every two fixed annuity sales.
She said that while VAs are on the rise because the stock market has started to recover, indexed annuities are also proving popular with the public.
“When the market first crashed in ‘08, VA sales dropped big time,” Moore said. “But now that the market is going up a little more, they are starting to go back up. We typically see sales of fixed annuities and indexed annuities going down in a time like that. However, fixed annuities sales have declined, while indexed have not. The main reason being that there are a lot of product innovations in this market right now that are providing guaranteed lifetime income that the purchaser cannot outlive without having to annuitize. That has become a strong value proposition for the products as well.”