Annuity rates are up. Are your sales?

Like the low rattle of a drum, the chorus, “annuity rates suck!” has been building to a crescendo over the past few years in this business. It seems that every agent I speak with blames the historical low interest rates for their declining sales of fixed and indexed annuities.

Personally, I am in awe each time I hear this complaint. After all, it is the guarantees in fixed and indexed annuities that consumers go wild for. That being said, I have to cut everyone some slack because rates really are bad and you obviously remember how much easier sales seemed to come when they weren’t.

So, I’m not sure about all of you, but I’ve had it. That is why with much enthusiasm, I have recently welcomed an increase in fixed and indexed annuity rates. Drum roll please.

Wahoo! Yippee! So much for excuses! I don’t want to hear it any longer. Annuity rates are on the uptick, so it is about time that sales reflected it!

But I can’t throw a party just yet…as of the date of this drafting, the average fixed annuity rate was just slightly less than 3 percent. And although this is an improvement, fixed annuity rates have been on a steady decline since hitting an average high of 5.53 percent in July of 2006. While recent rate announcements show promise, annuity rates aren’t even close to being back in the 5 percent to 6 percent range yet.

When will they get back to those higher rates? That depends a lot on the performance of the 10-year Treasury. How has the 10-Year Treasury affected fixed annuity rates? Let’s take a look:

What a great feeling after last year thinking that things couldn’t get any worse. Today we are back on the uptick! Insert smile here.