Recent data shows that despite the lower interest rates they may currently carry, annuities are very satisfying for consumers who purchase them.
According to data collected by LIMRA, the overwhelming majority of consumers who have recently purchased annuities were satisfied with their purchase. The study found that 86 percent of traditional fixed annuity buyers were satisfied, as well as 83 percent of those who bought indexed annuities and 75 percent of those who bought variable annuity products.
"Knowing they will have sufficient assets and income in retirement continues to concern consumers," noted Joseph Montminy, LIMRA assistant vice president for annuity research. "But the recent economic crisis and continued market volatility has made guaranteed income more valuable to consumers."
He added that more than 80 percent of deferred annuity buyers replied that they would also recommend an annuity to their loved ones, which can serve to help agents find more annuity leads beyond the insurance leads they already purchase online.
Consumers involved in the study reported a number of different reasons behind their purchase. The most popular reason given was that people were looking to supplement their retirement income from a pension. Other cited the desire to accumulate more retirement assets or set up guaranteed income for their retirement years.
Perhaps as a sign of increased awareness, some consumers also focused on the financial strength of the insurance company backing the plan. A full 71 percent of variable annuity buyers said that factor was very important when making their decision.
Other studies have also highlighted consumers desire for guaranteed retirement income following the recession. A recent whitepaper from NFP Advisor Services Group found that roughly two-thirds of independent financial advisors recommended those types of products to pre-retiree clients.