WINDSOR, Conn., June 1, 2010—Overall, guaranteed living benefits (GLB) were elected 87 percent of the time (when offered) in the first quarter of 2010, which is slightly down from the annual election rate in 2009 of 89 percent, according to LIMRA’s most recent annuity study.
“Consumers continue to choose GLBs to ensure their retirement security,” said Dan Beatrice, senior analyst, LIMRA Retirement Research. “The importance of the guaranteed paycheck-for-life to consumers is evident as guaranteed lifetime withdrawal benefit (GLWB) riders represent three-quarters of all new premium sold with a living benefit rider.”
The GLWB election rate remained at 64 percent, when any GLB is available for purchase in the first quarter of 2010. Guaranteed minimum income benefit (GMIB) riders were elected 16 percent of the time; while, guaranteed minimum accumulation benefit (GMAB) had four percent market share in the first three months of 2010.
LIMRA estimates that in the first quarter of 2010, GLBs were elected in contracts representing $17.2 billion, out of $19.8 billion new deferred VA premium where GLB was available. VA assets with GLB increased seven percent from $411 billion at year-end 2009 to $440 billion at the end of the first quarter of 2010, while total VA assets increased three percent from $1.389 trillion to $1.433 trillion during the same period.
The rate at which any GLB was elected held steady in the career distribution channel (73 percent), with independent (90%) and bank channels (91%) dropping one percentage point each, while the wirehouse/regional channel (90%) increased two percentage points.
LIMRA’s Variable Annuity Guaranteed Living Benefit Election Tracking Survey collects VA GLB sales, election rates and assets on a quarterly basis. The 26 survey participants represent 94 percent of first quarter 2010 industry sales in which a GLB was elected.
LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.