Do’s and don’ts of indexed annuities
May 23, 2016 by Scott Stolz
Beacon Research recently reported that fixed indexed annuity sales hit a record $14.4 billion in the third quarter of 2015, up 14.5 percent versus the previous quarter. While this is still well below the $32 billion in variable annuity sales that Morningstar reported for the same quarter, the industry is taking note that indexed annuity sales continue to grow, while variable annuity sales drift downward.
Morningstar calculates that variable annuity sales dropped 10 percent quarter over quarter. The increased sales in indexed annuities is partly due to more consumer-friendly product designs that have made the product more acceptable to broker-dealers and banks, and partly due to demographic trends that are making the product more appealing to baby boomers, who continue to put increasing value in the return of their money versus the return on their money.
