Immediate Annuity Buyers Changed: Cannex
The typical client is a little older, wants more income and is paying more.
Cannex Financial Exchanges Ltd. says the clients shopping for immediate annuities in the third quarter spent more and wanted more income than the clients shopping for immediate annuities a year earlier.
Consumers use immediate annuities to generate streams of income that start within a year after the contracts were purchased.
The average consumer who sought quotes for an immediate annuity in the third quarter was 68.6 years old, wanted to generate $39,526 in annual income, and was on track to spend about $354,158 on premiums, according to Cannex.
In the third quarter of 2020, the typical immediate annuity shopper was 68.3 years old, wanted $35,823 in annual income, and was on track to spend $317,310 on premiums.
Cannex is a Toronto-based company that provides pricing information for annuity and bank products in North America. Cannex bases its quarterly income annuity market reports on the quote requests that retail annuity advisors and retail annuity support desks feed through paid Cannex information services.
The Income Annuity Product Mix
The overall mix of income annuities that showed up in the quotes stayed about the same between the third quarter of 2020 and the third quarter of this year.
The percentage of deferred income annuities, or annuities with income streams starting 13 or more months in the future, held steady at 31%.
The new income annuity buyers were more likely to be seeking a lifetime stream of income for just one life.
Here’s how the mix of annuity duration types changed:
- Single life: 61% (down from 60%).
- Joint life: 26% (down from 27%).
- A specified number of years: 13% (down from 14%).
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