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Data & Research August 9, 2012
Individuals Seek Guaranteed Income Outside Retirement Plans
A LIMRA
study of annuity buyers found the top reason consumers gave for buying their
annuity is to supplement their Social Security or pension income.
Reported by Rebecca Moore
The second most popular reason is to accumulate assets for retirement; this is especially true for individuals younger than age 60. Receiving guaranteed lifetime income is also a concern, especially for buyers ages 60 and older.
Annuity buyers’ single most important financial objective is to have enough money to last their and/or their spouse’s lifetime. Only about one in four annuity buyers are very confident that their assets will last throughout their retirement.
“Knowing they will have sufficient assets and income in retirement continues to concern consumers,” said Joseph Montminy, LIMRA assistant vice president, annuity research. “But the recent economic crisis and continued market volatility has made guaranteed income more valuable to consumers.”
(Cont...)
Seventy-five percent of variable annuity buyers, 83% of indexed annuity buyers and 86% of traditional fixed annuity buyers indicated they are satisfied with their deferred annuity purchase.
The study also revealed that the financial strength of the insurer is very important to all annuity buyers. Seventy-one percent of VA buyers said the financial strength of the company was very important when purchasing an annuity; 68% of indexed and traditional fixed annuity buyers also place a company’s financial strength at that level of importance.
The study, conducted in the third quarter of 2011, surveyed 1,200 consumers, age 40 or over, who purchased a retail deferred annuity within the past three years.