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7 Best States to Find Prime Annuity Prospects

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The Federal Reserve looks as if it’s about to start increasing the interest rate benchmarks it controls “soon.”

For people who help clients use annuities to save for retirement, that’s a sign to get ready for the possibility of explosive sales growth.

U.S. life insurers invest heavily in high-grade corporate bonds to support the benefits guarantees built into annuity contracts that offer any kind of benefits guarantees. Big, random swings in rates could hurt annuity issuers, by kneecapping the economy and causing financial headaches for customers.

But modest, steady increases in rates should help annuity issuers, by increasing what they earn on new investments in bonds.

Life insurers would suddenly have an easier time meeting the obligations associated with annuities, life insurance policies, long-term care insurance policies and other policies issued in the past.

Insurers could use the new, higher-paying bonds to add guarantees to new annuity contracts.

The Prospect Filter

One question might be: Where are the most, best prospects for the richer annuities that could, possibly, appear after the predicted Fed interest rate spring rains?

The logical place to start could be households headed by people ages 45 through 64, with annual income of $100,000 or more.

Another answer might be that the best place to start with annuity marketing is the cradle. If toddlers can recognize the Aflac Duck and the Geico Gecko, why not the Annuity Ant, or the Income Planning Iguana?

Certainly, many people ages 65 and older buy annuities.

But people ages 45 through 64 are old enough to understand that they could grow up enough to retire someday, and young enough that they might not already be locked into a relationship with another source of income planning advice.

The Secrets of the Census

The Census Bureau has information about householder ages and income in the B19037 spreadsheets, which provide household income data collected by the bureau’s American Community Survey program.

The latest numbers available at press time were for 2019.

For a look at the seven states with the highest percentage of householders headed by people ages 45 through 64, with annual household income of $100,000 or higher, see the gallery above.

The prime annuity prospect percentage ranges from 2.6% in Puerto Rico, and 9% in Mississippi, to more than 20% in three states on the East Coast.

For data on all 50 states, the District of Columbia and Puerto Rico, see the data table below.

A user can get the kind of data used to create the data table either through the Census Bureau’s online dashboard system or by downloading specific spreadsheets.

The online system, for example, can deliver state-by-state data.

A user can also get data for other “geographies.”

An agent in Abilene, Texas, could get data specifically for the Abilene, Texas, metropolitan area, or for all Census Bureau “places” in Texas.

Users who download the bureau’s data spreadsheets can slice and dice the data in many ways.

The B19037 spreadsheet offers data for income groups ranging from under $10,000 to over $200,000. Users who want to try to market annuities to households with income from $40,000 to $44,999, or to households with annual income of $150,000 or higher, could use the spreadsheets, and math, to come up with prospect counts based on their own income filters.

Users with the ability to handle very large sets of data can analyze the American Community Survey results in still more ways, by downloading slices of microdata, or data for individual people and housing units, and coming up with their own rules for sorting and classifying the microdata.

One issue is that many of the figures in the Census Bureau’s tables are based on estimates, and the numbers for smaller, lower-population areas tend to have large margins of error. The numbers are better for getting a sense of where households in certain groups might be more common that for determining just how many high-income people ages 45 through 64 live on your block.

High-Income Householders Who Are Ages 45 Through 64, by State

Total Number of Households Householders, Ages 45-64 Householders, Ages 45-64, with Annual Household Income Over $100,000 High-Income Householders, Ages 45-64. as a Percentage of Total Population
Alabama 1,897,576 709,721 214,318 11.3%
Alaska 252,199 98,716 43,931 17.4%
Arizona 2,670,441 936,909 338,928 12.7%
Arkansas 1,163,647 420,592 107,036 9.2%
California 13,157,873 5,031,316 2,391,200 18.2%
Colorado 2,235,103 796,344 378,489 16.9%
Connecticut 1,377,166 552,895 271,371 19.7%
Delaware 376,239 141,483 58,921 15.7%
District of Columbia 291,570 86,954 43,681 15.0%
Florida 7,905,832 2,917,765 951,592 12.0%
Georgia 3,852,714 1,479,988 541,897 14.1%
Hawaii 465,299 165,720 81,167 17.4%
Idaho 655,859 233,118 77,768 11.9%
Illinois 4,866,006 1,808,871 749,622 15.4%
Indiana 2,597,765 970,046 323,896 12.5%
Iowa 1,287,221 447,079 155,027 12.0%
Kansas 1,138,329 402,174 145,724 12.8%
Kentucky 1,748,732 653,149 180,463 10.3%
Louisiana 1,741,076 633,566 183,124 10.5%
Maine 573,618 223,352 73,167 12.8%
Maryland 2,226,767 888,537 470,133 21.1%
Massachusetts 2,650,680 1,023,349 541,819 20.4%
Michigan 3,969,880 1,516,163 523,233 13.2%
Minnesota 2,222,568 813,146 367,057 16.5%
Mississippi 1,100,229 416,406 99,157 9.0%
Missouri 2,458,337 887,049 291,701 11.9%
Montana 437,651 151,472 48,242 11.0%
Nebraska 771,444 264,946 94,410 12.2%
Nevada 1,143,557 416,273 151,398 13.2%
New Hampshire 541,396 223,745 105,076 19.4%
New Jersey 3,286,264 1,338,226 700,579 21.3%
New Mexico 793,420 285,587 78,256 9.9%
New York 7,446,812 2,853,523 1,249,972 16.8%
North Carolina 4,046,348 1,523,116 496,913 12.3%
North Dakota 323,519 99,660 38,741 12.0%
Ohio 4,730,340 1,765,911 589,413 12.5%
Oklahoma 1,495,151 519,595 155,050 10.4%
Oregon 1,649,352 575,175 224,010 13.6%
Pennsylvania 5,119,249 1,942,641 733,525 14.3%
Puerto Rico 1,170,982 445,980 30,041 2.6%
Rhode Island 407,174 165,446 70,605 17.3%
South Carolina 1,975,915 735,182 228,310 11.6%
South Dakota 353,799 122,449 41,441 11.7%
Tennessee 2,654,737 987,649 308,587 11.6%
Texas 9,985,126 3,677,063 1,389,114 13.9%
Utah 1,023,855 332,649 156,687 15.3%
Vermont 262,767 100,374 36,381 13.8%
Virginia 3,191,847 1,215,016 569,922 17.9%
Washington 2,932,477 1,045,353 504,852 17.2%
West Virginia 728,175 267,690 66,804 9.2%
Wisconsin 2,386,623 882,622 327,145 13.7%
Wyoming 233,128 80,506 29,253 12.5%
TOTAL 123,973,834 46,272,257 18,029,149 x
AVERAGE x x x 13.8%
MEDIAN x x x 13.0%

x

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