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Creating Guaranteed Lifetime Income: Income Annuity Buyer Study (2016)

Judy Zaiken, CLU, ChFC; Joseph E. Montminy, ASA, MAAA; Teodor (Teddy) Panaitisor 12/13/2016

LIMRA Retirement Research

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Industry Issues

Fueled by demographic, regulatory, technological, and economic trends, the demand for guaranteed lifetime income is growing. In particular, there is an increasing market appeal for Single Premium Immediate Annuities (SPIA) and its more recent manifestation, the Deferred Income Annuity (DIA). While headwinds persist, market dynamics are converging to bolster the category.

Key Findings

  • Income Annuities are increasingly purchased with tax-qualified money. While DIA funding is predominantly tax-qualified retirement savings (74%), SPIAs are still more often funded with non-tax-qualified savings (52%).
  • SPIAs are more often sold to women.  Almost 62% of single life SPIAs and 57% of single life DIAs are sold to women. 
  • Joint-life sales are most commonly owned by a male, at 74% for SPIA and 73 % for DIA, yet most commonly cover mixed-gender spouses.
  • At 72 years, the average SPIA purchase age has dropped slightly to meet head on with the age of leading edge Boomers.
  • At just 59 years, the average DIA purchase age has brought the income annuity market opportunity down to include much younger age consumers.

Related Resources

Related Research

U.S. Individual Annuity Market

Benchmark sales, persistency, analysis, and outlook for a range of annuity products, reported by distribution channels and market types.

Canadian Individual Annuities

Benchmark sales for a range of fixed and segregated fund contracts; by distribution system and province.

Retirement Investors: Key Trends and Opportunities

LIMRA’s Retirement Investors Survey tracks the perceptions, attitudes, behaviors, and financial condition of retirees and non-retired workers in the United States.

Group Annuity Risk Transfer

Understand the trends from the quarterly sales, asset, and contract data in the group annuity risk transfer market.

For more information, please contact tpanaitisor@limra.com.