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A recent LIMRA-CANNEX study suggests a growing interest in deferred income annuities as nine companies (seven covered in the survey1) currently offer one and an additional eight companies are planning to introduce their own deferred income annuity (DIA).

The majority of these DIAs have been launched in the last few months. Sometimes referred to as a longevity, deferred payout, or advanced life-delayed annuity, the DIA pays income to the policyholder starting at least 13 months from the policy date. Whereas the immediate income annuity is only appropriate for those looking for income starting immediately, the deferred income annuity would appeal to someone in need of guaranteed income later, such as the 77 million Baby Boomers in the United States.

One section of the LIMRA-CANNEX study Features in Income Annuities—Immediate and Deferred Income Annuity Designs looked at the differences and similarities of immediate and deferred annuities.

While still a small percentage of the overall income annuity market, the study also showed that deferred income annuity sales reached more than one billion dollars in 2012.

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1While the study examined seven companies’ products, two additional companies introduced deferred income annuities since publication of the study.  

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