A recent LIMRA study found that most of the people who bought annuities in the past three years are happy with their purchase. LIMRA, an insurance industry group with members from more than 850 companies in 70 countries, performed this study during the third quarter of last year. They looked at deferred annuities purchased within the last three years by 1,200 different people over the age of 40. This information comes from Bank Investment Consultant’s “Most Annuity Buyers Satisfied: LIMRA,” by Margarida Correia.
Five out of six of those surveyed said that they would definitely recommend that their friends buy annuities after their own personal annuity experience. LIMRA broke the survey into three different types of annuities. Variable annuity purchasers were happy with their products 75% of the time. Purchasers of equity indexed annuities were satisfied with their annuity products 83% of the time. Of those who purchased traditional fixed annuities, 86% of them were satisfied with their annuity purchases. This high rate of satisfaction is likely due, at least in part, to greater transparency and ethics in the annuity business. Investors knew exactly what they were getting in regards to interest, fees, and guaranteed income payments.
While you may think that the top reason given for purchasing annuities is the guaranteed lifetime income, that actually was the third most popular reason in this survey. The top reason given was bridging the retirement gap between money received from social security and pensions and money needed to meet living expenses in retirement. Accumulating wealth for retirement was the other reason given for purchasing annuity products. Purchasers of all three annuity types found the financial strength of the issuing insurance company to be a very important factor when purchasing an annuity. Variable annuity purchasers thought it was important 71% of the time, while fixed and equity indexed annuity purchasers though so 68% of the time. Are you happy with your annuity purchase? Share it with us in the comment section.
Written by Rachel Summit
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