Lifetime-Income Promise Fuels Surge in Variable Annuities
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U.S. insurers’ sales of variable annuities jumped 24 percent in the first quarter, led by policies that promise lifetime income and protect against market declines, at a time when investors are still wary of stocks.
The retirement products’ growth is driven in part by concerns that another stock market drop like the one in 2008 could wipe out savings, said Moshe Milevsky, finance professor at the Schulich School of Business at York University in Toronto. Consumers “fear that the S&P at 1,300 is a mirage and it’s going to go back to 700 for the rest of our lives,” he said.