Majority of Indexed Annuity Buyers Opt for Guaranteed Lifetime Income

Guaranteed lifetime withdrawal benefits (GLWBs) riders continue to play an important role in the sale of indexed annuities, according to LIMRA Secure Retirement Institute research. Of the $10.6 billion in indexed annuities sold in the first quarter 2014, 86 percent offered a GLWB rider. Consumers elected GLWB riders (when available) for 68 percent ($6.2 billion) of annuity contracts purchased in the first quarter.

Prior LIMRA Secure Retirement Institute research has shown that Americans' top concern is having enough money for a comfortable retirement. In a separate LIMRA Secure Retirement Institute study of recent indexed annuity buyers, 9 in 10 listed having enough money to last throughout their and their spouse's lifetime as the top objective for their financial assets. GLWB riders assure consumers income for life no matter how long they live or how well their underlying investments perform.

A GLWB rider was available in 136 out of 184 indexed annuity products in the first quarter of 2014. With indexed annuities bought through an independent agent, 74 percent elected a GLWB rider, which was the highest among distribution channels selling indexed annuities. The lowest election rate was in the bank channel, with 30 percent electing a GLWB, when available.

Indexed annuity assets with GLWB reached $96 billion for participants as of the end of the first quarter 2014, which represents a four percent increase from the fourth quarter 2013.