Setting a record, income annuity sales grew almost 18% in fourth-quarter 2011 and nearly 7% for the entire year, according to estimates from the Beacon Research Fixed Annuity Premium Study released Friday.
This compares to indexed annuity results, which stayed flat compared to Q4 2010 and fell 0.3% year over year. Total annual fixed annuity sales fell 1.1% to $75.6 billion, according to Beacon.
Jeremy Alexander, CEO of Beacon Research, pointed to the difficult interest rate environment.
“Income annuities did remarkably well, considering that lower interest rates and a flatter yield curve reduced payouts,” Alexander said in a statement. “Income annuities generally provide the most retirement income bang for the buck. Sales results indicate that advisors and their clients are becoming aware of how these products can be used to create a personal pension.”
Guaranteed lifetime income benefits helped sustain indexed annuity sales despite lower cap or participation rates, he noted.
For the year, income annuity results advanced 6.6% to $8.48 billion from $7.96 billion. Indexed annuities fell 0.3% to $32.98 billion from $33.08 billion.