Variations on the indexed annuity offerings are providing a growing number of pre-retirees and retirees with new financial planning options.
Dana Pedersen
“They are a great story right now,” said Dana Pedersen, vice president for business development for The Phoenix Cos. “People can get a guaranteed lifetime income stream while participating in the market’s potential upside.”
These new products are benefiting from people’s fears in the wake of the economy’s near collapse in fall 2008. Last year, indexed annuity sales set a record, topping $30.1 billion and eclipsing 2008’s numbers by 13%, according to AnnuitySpecs.com.
After a slight dip in the first quarter, this year’s second quarter continued the strong performance, falling off 0.1% from the second quarter of 2009, which also set a record. Sales for this year’s second quarter were $8.3 billion.
“People who, unfortunately, may have lost money during the market turmoil of the last couple years, don’t want to risk losing their principle,” Pedersen told IFAwebnews.com.
Pedersen said the products, especially those with riders providing guaranteed lifetime income, appeal most to people who have retired and want to generate a guaranteed level of income to ensure they can maintain their lifestyle. In addition, many riders also provide a guaranteed increase to the income amount during the deferral period prior to the income start date and therefore also appeal to pre-retirees who may not be on track to meet their retirement goals.
The customization, she said, will only continue, with new index crediting strategies and riders that provide a death benefit in addition to the income protection.
“I think these products will remain quite popular,” she said. “Even when market downturns and volatility are a distant memory, consumers will still want protection, and these products provide it.”
This article first appeared in Insurance & Financial Advisor.
New indexed annuity offerings offer salve for burned investors via IFAwebnews.com .
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