STUDY SHOWS
CRITICS WRONG
ABOUT INDEXED ANNUITIES

Families
Turn to
Annuities
for Security
Seventy nine percent of non-qualified annuity owners say annuities are an important source of retirement security and give them peace of mind during times of financial uncertainty, according to a survey conducted by the Gallup organization and Mathew Greenwald & Associates. More than half of annuity owners believe that they have sufficient of more than sufficient money for retirement.

The study also showed tht 83 percent of annuity owners included in the survey indicated that their annuities were intended to provide an added financial layer in the event they or their spouses live longer than expected. Another 81 percent said their annuities would allow them to avoid being a financial burden on their children in their later years.

Source: Insurance news Net Magazine, November, 2009

Indexed annuities are proving to show a solid return, contrary to some criticism of the products, according to a study by the Wharton financial Institutions Center.

The study, “Real World Index Annuity Returns,” showed that some indexed annuities produced returns at par with CDs, fixed rate annuities, taxable bond funds and even equities at times. The products also limited downside returns associated with

falling markets, the report said.

The center also questioned the accuracy of some studies in their use of hypothesized crediting rate formulas, constant participation rates and caps and unrealistic simulations of stock market and interest rate behavior.

More Retirement Plans
Use Annuities

More companies are offering annuities as an option in their 401(k) and other defined contribution plans. In 2009, 22 percent of companies are offering a lifetime annuity optioin in their defined contributioin plans while another 10 percent are considering offering the benefit, according to Watson Wyatt report.

This new development comes as more investors change their attitudes about annuities after

the financial meltdown showed the value of a guaranteed income stream. Lifetime income was identified by a majority of plan participants as the most important feature of a retirement investment product. Although many employers are still wary, experts predict more annuities will be offered in 401(k) plans in the coming years.

Source: Insurance news Net Magazine, November, 2009

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