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Retirement Planning > Retirement Investing > Annuity Investing

The Plain Vanilla Fixed Annuity Was the Q1 King

By Allison Bell

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One of the oldest types of individual annuities that the LIMRA Secure Retirement Institute tracks — the book value annuity — has won the latest games of sales growth thrones.

Sales of book value annuities soared to $10 billion in the first quarter, up 77% from the total for the first quarter of 2018.

(Related: MVA Annuity Sales Were Wicked Hot: IRI)

A relatively new type of individual contract — the indexed annuity that’s registered with the U.S. Securities and Exchange Commission as a variable annuity — also looked like sales growth royalty.

Sales of “registered indexed linked annuity” contracts, or RILA contracts, increased 59% between the first quarter of 2018 and the latest quarter, to $3.5 billion.

Annuity Definitions

Analysts at the LIMRA institute have included those figures in their latest report on individual annuity sales. The institute analysts base their figures on results from an issuer survey. The analysts estimate that their survey participants account for about 94% of U.S. individual annuity sales.

A book value annuity is an arrangement that pays the holder a guaranteed crediting rate, even if the holder takes funds out early.

An indexed annuity is an annuity with a crediting rate that’s linked to the performance of one or more investment indexes.

More Annuity Sales Results

Here’s what happened to sales of some other types of annuities included in the survey data:

  • Indexed annuities classified as fixed contracts: $18 billion (up 24%)
  • Variable annuities: $19 billion (down 14%)
  • Market-value-adjusted fixed annuities: $5 billion (up 52%)
  • Fixed immediate annuities: $2.8 billion (up 33%)
  • Structured settlements: $1.5 billion (up 7%)

— Read Book Value Annuity Sales Rise 94%, on ThinkAdvisor.

— Connect with ThinkAdvisor Life/Health on LinkedIn and Twitter.

Allison Bell

Think_Allison

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.