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July 28, 2020 at 02:01 AM
Indexed annuities that are registered as variable products continued to sell well in the second quarter, in spite of weak sales of most other types of individual annuities.
The Secure Retirement Institute — which calls indexed variable annuities “registered index-linked annuities,” or RILAs — says RILA sales increased 8% between the second quarter of 2019 and the latest quarter, to $4.5 million.
Resources
- A copy of the latest Secure Retirement Institute survey summary is available here, and a copy of the underlying summary data is available here.
- An article about annuity sales figures for the third quarter of 2019 is available here.
Sales of every other type of annuity fell, due both to the effects of COVID-19 on sales efforts and the effects of low interest rates and investment market volatility on insurers’ ability to offer attractive crediting rates.
Total U.S. annuity sales fell 24%, to $49 billion.
Many life insurers see selling indexed variable annuities as a relatively safe alternative to offering other types of annuities. The issuer of an indexed annuity filed as a non-variable product must guarantee the contract holder’s principal, no matter what happens in the bond markets and other financial markets. The issuer of an indexed variable annuity can limit itself to providing a defined amount of account value protection.
