An executive at New York Life Insurance Company has an idea for this week’s National Retirement Planning Week campaign: Consumer demand for income annuities is still out there.
Dylan Huang, head of retail annuities at New York Life, says sales of the products have been growing, slowly, in spite of the effects of prolonged low interest rates on the amount of income the contracts can generate.
“We believe income annuities are the ultimate way to secure retirement, as it provides a guaranteed paycheck for life, while hedging against the numerous financial risks retirees confront in the decumulation phase,” Huang said in a written commentary.
An income annuity contract can convert all or part of a consumer’s assets into a stream of income, immediately, or at a designated future date.
Sales of one type of income annuity, single-premium immediate annuities (SPIAs), had a compound annual sales growth rate of 3.2% over the past five years, according to LIMRA Secure Retirement Institute data cited by Huang.