With all of the downsides associated with the Covid-19 pandemic over the last few years, one positive result in the insurance industry is the boosted interest in annuity products for working Americans. According to the U.S. Individual Annuity Sales Survey conducted by the Secure Retirement Institute® (SRI®), annuity sales in the U.S. saw a 16% increase in 2021.
Growth in annuity sales reflected across multiple types of annuities and this past year’s record-setting annuity sales marks the highest annual sales since 2008. Fixed annuity sales grew for 2021 by 7%, amounting to $129.9 billion. Fixed Indexed annuity sales grew by 18% in the fourth quarter, totaling $16.6 billion, and totaling $53.4 billion for the year.
Prior to the pandemic, only about 10% of employers provided annuities as a retirement planning option, but research by Fidelity Investments found nearly 80% of workers are interested in these types of products. Some of the reasons for this increased demand include:
Combating Rising Inflation: According to Todd Giesing, assistant VP of SRI® Annuity Research, fixed-rate deferred annuities provide about three times the return of current certificates of deposit (CDs) on average, making them very beneficial to investors looking for growth that can offset high inflation.
Capitalizing on Stock Market Growth: The double-digit growth seen in index-linked annuity sales can be attributed to the stock market’s powerful performance in the fourth quarter, as well as in 2021 overall.
Managing Financial Risk: Annuities mitigate financial risk by ensuring the annuitant will have a reliable source of income even if they run out of retirement savings. They can also lock in gains generated during more prosperous times to help weather an economic downturn.
Contact the experts at Wholehan Marketing to learn more about how annuities can be a valuable part of your clients’ portfolio!