Annuity Sales Are Predicted to Grow In These States
Fixed indexed annuities have become the darling for retiring with guaranteed income.
Nearly 3 million people will likely purchase fixed index annuities (FIA) in 2017. (2019, 4.2 million estimated new purchasers)
Three states lead this annuity buying increase: Texas, Florida, and California, with an estimated 720,000 households likely to purchase an annuity.
California makes up 325,000 of those, a stunning 16.5% growth rate over three years.
Those three states make up 26% of households of likely buyers.
The top 10 states with households likely to purchase an annuity:
- New York
- New Jersey
- North Carolina
These states account for nearly 55% of households likely to purchase an annuity.
The question to ask is, why? Why do so many people trust their necessary retirement income money to annuities?
The answer is as essential as can be; annuities offer no market downside, only increases. Grants provide safety and security. Annuities can provide lifetime income regardless of how long you live, and spouses can be included! Annuities are guaranteed by the contract issuer and are highly regulated by each state’s insurance department.
This data was extrapolated from MacroMonitor data which tracks financial transactions, assets, and credit scores.
The predictive annuity purchasing data also correlates to households likely to make digital purchases. Making digital purchases is a sign of ‘tuned-in-ness.’ In other words, those with greater access to information tend to purchase annuities in higher numbers.
The data shows awareness of annuity products is lower than other financial products such as Bank CDs, stocks, bonds, mutual funds, and real estate investment trusts.
The study didn’t conclude exactly why market awareness for annuities is lower than for other products. Still, James Thompson from Annuity Marketing Data Partners believes it’s due to poor comprehensive marketing by the insurance industry that sells annuities.
Thompson said: “Annuities are conservative investments and insurance companies believe the products speak for themselves. They don’t believe in spending resources on expensive marketing and having to pass those costs onto consumers, right or wrong.”
Publishing annuity information online lowers product awareness costs and likely translates to keeping annuities an affordable financial product for many people.
“The industry could do better to raise offline awareness of annuities,” Thompson added. “But they simply don’t have excess funds that the flashier financial products have.”
But that doesn’t change the fact that more and more people are considering buying annuities as people lose faith in public markets and move to more conservative financial products with built-in guarantees.
When considering how your big retirement dollars are invested, consider the advantages of an annuity.