Though many income annuity issuers have seen only small upticks or even declines in business over the last several years, the ongoing economic recovery seems to be helping the industry considerably. In the final three months of last year, sales of these financial products reached an all-time high.
Data from the Insured Retirement Institute showed that income annuities rose significantly in the fourth quarter of 2012 to $2.38 billion, according to a report from Life Health Pro. In addition, it's believed that many of these products, particularly those that defer income, will increase considerably over the course of this year, and are projected to become the fastest-growing type of annuity available.
For the fourth quarter alone, fixed annuities had qualified sales of $8.26 billion with another $7.94 billion in non-qualified sales, the report said. In addition, these climbed to $33.8 billion for qualified sales and $33 billion for non-qualified over the course of the year.
Cathy Weatherford, president and chief executive officer for the IRI, noted that this trend is largely the result of both consumers becoming more interested in this type of product, and also issuers growing more creative in developing and marketing the products, the report said.
"The income annuity sales reflects two trends we are seeing in the market - demand and innovation," she said, according to the site. "To ensure that they have guaranteed retirement income for the remainder of their lives, many consumers are turning to income annuities as a type of longevity insurance."
Moreover, during this time, the amount of assets held in variable annuities climbed to another record, of $1.64 trillion. That was up slightly from $1.62 trillion at the end of the third quarter, and a 9.1 percent increase on an annual basis.