Annuity Sales Hit Record High Of $310.6 Billion In 2022
The annuity sales market is booming, with a record $310.6 billion in sales expected in 2022. Several factors, including the aging of the Baby Boomer generation and increased life expectancy, rising interest rates, and stock market uncertainty, are driving this surge.
Annuities offer retirees a way to guarantee income for life, and with more and more people living longer lives, they are an increasingly popular option.
Factors That Contributed To The Explosive Growth Of Annuities In 2022
In 2022, annuity sales hit a record high of 310.6 billion in 2022, a 17% increase from the prior record set in 2008, according to Limra data. Several factors contributed to this surge, including the following:
- Market conditions
- Regulatory changes
- Consumer behavior
- The Federal Reserve’s aggressive interest rate hikes
- A faltering stock market
- Lingering fears of a recession led consumers to seek safety in annuities.
Baby boomers reaching retirement age and needing financial security in uncertain times also drove annuity sales. Fixed annuities saw the most significant increase, indicating that consumers prioritize guaranteed income streams for necessities in old age.
These factors collectively contributed to the explosive growth of annuities in 2022, highlighting the importance of financial planning and stability for consumers. Consumers need to seek the help of an annuity expert advisor who conducts annuity research daily to ensure they are buying an annuity that is best for them.
Will Annuities Sales Continue To Surge In 2023 Due To High Inflation & Unemployment
While rising inflation may contribute to a general sense of economic instability, it’s unclear whether annuity sales will continue to surge in 2023. Annuities tend to sell better during economic uncertainty, but the impact of inflation on consumer behavior and investment decisions is complex.
As President Biden continues to push for reduced inflation, this will likely make the US into a recession, which could cause annual sales of annuities to spike in 2023 as consumers seek to protect their retirement income.
Corporations are increasingly laying off more employees due to the inflationary rates and higher costs to leverage their businesses. The rising costs of raw materials, energy, healthcare, and taxes make it difficult for many corporations to maintain profitability.
As a result, they resort to downsizing their workforce to reduce their expenses, increase their profit, and remain competitive. This leads to a loss of employee income and jobs and hinders the country’s overall economic growth.
We could likely see another year of record sales for 2023 based on the current market conditions.
US Annuity Sales 2015-2022
According to limra annuity research, from 2015 to 2022, annuity sales in the US experienced a significant increase of 235.19% or 179.8 billion dollars of new annuity market sales.
What Are The Current Fixed Annuity Rates In June 2023
As of June 2023, fixed annuity rates have seen a surge in sales, with a 22% increase in the year’s first quarter compared to the previous quarter. This increase in sales is attributed to the rise in interest rates seen over the past few months.
Current Annuity Rates For June 2023 are between 4.60% and 5.65%, depending on the day fixed annuity rates are released. As of this writing, current fixed annuity rates are the following:
- Oceanview – 4.70%
- Sentinel Security Life – 5.40%
- Americo – 5.05%
- Atlantic Coast Life – 5.45%
- Nassau – 5.45
- American National – 5.45%
Each company has different guidelines and requirements to qualify for each program. Call and talk with one of our Annuity Experts to discuss the current rates based on the day you call and the specific guidelines.
Are Annuities A Great Option To Protect Your Retirement Income
An annuity is an investment product offered by insurance companies that provides a guaranteed income stream for life in retirement. There are different types of annuities, but they generally fall into two categories: investment-based annuities and pension-like annuities. While annuities can be beneficial in protecting retirement income, they also have potential drawbacks.
On the positive side, annuities can provide a guaranteed income stream for life, which can help retirees cover necessary expenses like housing, utilities, and food. This can be especially important for those concerned about running out of money in retirement.
Additionally, annuities can provide downside protection in times of market volatility, which can help retirees feel more secure in their financial situation.
However, annuities also have their downsides. They can include higher fees for more complex annuity products designed to provide more flexibility to earn higher interest rates. Additionally, annuities can be illiquid and difficult to access if unexpected expenses arise.
Not every retiree needs an annuity, and it’s essential to carefully consider whether it is the right choice for one’s financial situation. However, with the total annuity sales topping 310.6 billion in a single year, they are a clear winner for many people seeking income protection.
Annuities can be an excellent option for those who want a guaranteed lifetime income in retirement and no longer want to participate in the volatile stock market.
How Do Most People Buy Annuities: Annuity Advisor
According to annuity statistics, there are several ways to purchase an annuity. The most popular channels are
- Independent broker-dealers
- Independent annuity agent
- Banks
- Career agents working direct with an annuity company
Integrity Now Insurance Brokers is an independent annuity consultant representing 150 annuity companies. This allows our clients to shop for the best annuity company in their local state without contacting dozens of different companies.
As an independent agent, we can present fixed-rate deferred or immediate annuities from all available insurance markets to ensure they receive the best retirement income rates.
Fixed-rate deferred annuity sales are a popular option as clients who invest in a fixed-indexed annuity participate in some stock market upswings without participating in the market’s downside.
Integrity Now Insurance Brokers specializes in Annuities and Medicare plans throughout the United States.
Contact one of our licensed annuity agents today at 562-735-3553 and request a retirement plan review to protect your financial future.
SOURCES
- LIMRA. “LIMRA: 2022 U.S. Retail Annuity Sales Shatter Annual Sales Records Set in 2008.” Accessed June 8, 2023.
- LIMRA. “Preliminary U.S. Annuity Fourth Quarter 2022 Sales Estimates.” Accessed June 8, 2023.
- LIMRA. “Secure Retirement Institute: Total Annuity Sales Fall 9% in 2020.” Accessed June 8, 2023.
- LIMRA. “Secure Retirement Institute: Total U.S. Annuity Sales Highest Since the Great Recession.” Accessed June 8, 2023.
- LIMRA. “U.S. Individual Annuity Sales (3rd Quarter 2022 YTD).” Accessed June 8, 2023.
- Thinkadvisor. “Top 20 Companies for Annuity Sales: 2014” Accessed June 8, 2023
