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Immediate Annuity Stats


LIMRA recently gathered data about immediate annuity products, according to the Insurance Networking News article “Immediate Annuities Are Big-Ticket Items” by Howard J. Stock.  While immediate annuities are certainly not the largest annuity product in terms of sales, they accounted for $7.5 billion in 2009.  Research suggests that immediate annuity sales were higher than that in 2010, but won’t quite reach 2008’s sales of $7.9 billion.  To put it in perspective, total annuity sales in 2009 were $238.8 billion.

The average premium for an immediate annuity is $107,000 and a full 90% of those who purchase these investments choose to make them a death benefit annuity by adding a rider to either allow their heirs to receive the payments they were receiving or pay out the balance of the premium if they die.  Many of those purchasing an immediate annuity want to preserve their liquidity options because two-thirds of investors add a rider that will allow them access to their principal in case of an emergency.

Of those purchasing an immediate annuity, their ages seemed to cluster in two age groups, 62-66 and 70-71, although the average age for buying the products is 73.  The first group seems to be using pretax money from IRAs to purchase their annuities, indicating that they are making multiple financial transactions for retirement at one time.  This would include deciding when to take Social Security payments or distribution requirements from other plans.  If you think an immediate annuity is one of the best annuities for your retirement planning, speak with an expert financial advisor.

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