Sales of most types of individual annuities soared in the first quarter, according to preliminary issuer survey results from LIMRA.
Total sales of individual annuities increased 47% between the first quarter of 2022 and the latest quarter, to $93 billion.
Sales of traditional variable annuities fell 30%. But sales of a second type of variable annuity, the registered index-linked annuity, rose 8%, and sales of fixed annuities climbed 98% And sales of two types of annuities that clients can use to convert payments directly into a lifetime stream of income payments — income annuities — soared.
Sales of fixed immediate income annuities, which begin to pay benefits quickly, rocketed up by 120%, and sales of deferred income annuities, which begin to pay benefits at a later, scheduled date, took off on an even more powerful rocket, rising 125%. Deferred income annuity sales might have been helped by the publicity surrounding passage of the Secure 2.0 package, which includes provisions intended to promote use of deferred income annuities.
Economists have sometimes written papers about why income annuity use has been much lower than economists think it should be. Higher rates and increased interest in lifetime income arrangements could be starting to turn the sales spotlight in income annuities’ direction.
What It Means
For you and your clients, the new LIMRA numbers mean that annuities are hot.