Immediate Annuity Shoppers Seek 9.4% More Annual Income: Cannex

U.S. residents who were shopping for immediate annuities in the fourth quarter of 2021 seemed open to paying more in premiums to get more annual income.

Cannex Financial Exchanges, a Toronto-based company annuity and bank product data provider, has published data supporting that conclusion in an analysis of immediate annuity quote requests it processed during the quarter.

Immediate annuities help buyers create income streams that start within a year after purchase.

The average consumer who sought Cannex quotes for an immediate annuity in the latest quarter was 68.3 years old, hoped to produce $40,184 in annual income, and was preparing to spend $368,542 on premiums, according to Cannex.

The amount of annual income sought increased 9.4%, year-over-year.

In the fourth quarter of 2020, the typical immediate annuity shopper was 68.6 years old, hoped to produce $36,721 in annual income, and was preparing to spend $328,646 on premiums.

The average premium proposed was up 12%.

Cannex also found a big decrease in quote requests for immediate annuities with cash refund features, or features that lead to beneficiaries receiving a lump-sum payment, consisting of premiums paid in, if an annuitant dies before the amount of income received exceeds the amount of premium payments.

The percentage of quotes for contracts with cash refund features fell to about 40%, from about 52% a year earlier.

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