Why aren't more retirement plan assets being roiled over into immediate annuities
? This may be due, in part, to the favorable tax treatment of payouts from SPIAs purchased with nonqualified funds.
Although this does not provide as high of an annual payment as immediate annuities
(typically equal to 7% to 10% of the deposit), it provides for ongoing upside participation in the separate account options.
Give examples--traditional fixed annuities, fixed index annuities, immediate annuities
, variable deferred annuities with death benefit and living benefit guarantees, long permanent life policies, etc.
(IAs) are a small segment of the overall fixed annuity (FA) market, pulling in an estimated $6.14 billion in 2006 sales in the United States--just 8.7% of the $70.9 billion estimated overall market, according to Beacon Research data.
They said that in 1998, about half of all newly purchased individual immediate annuities
were the funding vehicles for structured-settlement cases, which result from awards in legal cases and, therefore, do not represent income to retirees.
The important thing about immediate annuities
is that sales are rising, seemingly without regard to interest rate or stock market movements, Alexander says.
So, some do have a hard time thinking about lifetime immediate annuities
or locking up their money in lifetime income plans since they are "at such a young age."
Some of the innovation will come in the markets for single-premium immediate annuities
and other types of income annuities, he said.
Many products are sold as annuities these days, including life immediate annuities
, which focus on managing longevity risk.
It provides fixed indexed annuities, fixed rate annuities, single premium immediate annuities
and indexed universal life insurance policies and is a subsidiary of HRG Group Inc.
: These annuities are designed to guarantee owners a predetermined income stream on a monthly, quarterly, semiannual or annual basis in exchange for a lump sum.
Sales of income annuities -- single premium immediate annuities
and deferred income annuities -- are up 22 percent and fixed deferred annuities are up 12 percent compared to the same period last year.