Turning up the Heat: What’s Driving FPs’ Annuity Sales

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Authors

Matthew Drinkwater, Ph.D., FSRI, FLMI, AFSI, PCS
Corporate Vice President, Annuity and Retirement Income Research
LIMRA and LOMA

Laura A. Murach, ACS, LLIF, FLMI
Research Director, Distribution Research
LIMRA and LOMA

November 2025

November kicks off the holiday season and the special meals that come with it — each requiring the right mix of ingredients to be memorable. Like a favorite recipe, the annuity market has simmered over time, and the current blend of conditions is resonating with financial professionals (FPs).

Between 2020 and 2024, annuity sales nearly doubled — and they’ve remained strong through the first half of 2025 (Figure 1). This isn’t just a seasonal spike; it’s the result of careful preparation, evolving tastes, and a growing appetite for guaranteed income solutions.

Figure 1. Total Individual Annuity Sales ($ in billions)

Source: U.S. Individual Annuity Yearbook: 2024 Year in Review , LIMRA, 2025.

Setting the Table

Every great dish starts with quality ingredients, and the annuity market has plenty to work with. We have a macro-level sense of why this record growth has happened:

Rising interest rates in 2022 and 2023 gave carriers the clearance to offer higher crediting rates on fixed annuities, often much higher than current average certificate of deposit (CD) rates or average rates on older fixed annuity products coming off surrender periods. Carriers offering traditional variable annuities and registered index-linked annuities (RILAs) also benefited from higher interest rates. They were able to make rollup rates and other features such as guaranteed lifetime withdrawal benefits more generous than they had been in years.
The “Peak 65” demographic wave brought more Americans into the life stage where annuities are most often served.
A booming stock market in 2023 and 2024 (with the S&P 500 up 24 percent and 23 percent, respectively) increased account balances, giving investors more to work with — and making market-linked products with downside protection more relevant.
Consumer awareness of annuities has heated up, through the efforts of the Alliance for Lifetime Income by LIMRA and a rising focus on in-plan guaranteed income investments.

However, the real story lies in how financial professionals have used these ingredients — and what is happening at a more micro-level.

Stirring the Pot

Recent research shows that annuities are no longer just a side dish in retirement conversations — they’re becoming a main course.

Among American investors aged 40 and older with at least $100,000 in household investable assets who have worked with an FP for two or more years, 39 percent discussed annuities with their FP in the past two years — more often than they discussed CDs, exchange-traded funds (ETFs), or life insurance. Notably, nearly half of those annuity conversations were initiated by the investors themselves.

Financial professionals surveyed in July and August 2025 who held annuity licenses, had at least three years of experience as FPs, and were not affiliated with an insurance carrier are noticing the shift. On average, they reported that 32 percent of their recent retiree and pre-retiree clients proactively expressed interest in annuities over the past two years, and 58 percent said this proportion had increased compared to the prior two-year period.

The findings are consistent with a step-up in demand for annuities among investors who are increasingly likely to be talking about these products with their financial professional.

Mixing Things Up

When asked to compare their annuity production before and after 2020, 55 percent of FPs said their sales had increased, and another 24 percent said they remained steady. But not all FPs were equally productive.

Younger and less-seasoned FPs were the most likely to have significantly increased production. Many are still building their practices, and those who started their careers at agency-building companies may be more insurance-oriented based on their recent training.
More experienced FPs, particularly those with 20-plus years in the business, were more likely to have pulled back — perhaps as many of their clients already have annuities.

Interestingly, the data do not suggest a flood of new annuity sellers entering the market since 2020. Instead, existing producers have simply turned up the heat. For example:

Fixed-rate deferred annuities drove much of the recent growth, but 78 percent of FPs who hadn’t sold them before 2020 still hadn’t sold them after.
Registered indexed-linked annuities, however, saw the most new adoption: 35 percent of FPs who hadn’t sold them before 2020 began offering them in the years since.

When asked why they increased annuity production, FPs often pointed to client demand, especially if they had experienced an increase in the proportion of their clients with whom they had discussed annuities. In addition, “demand” likely reflects FPs’ recognition of increased need among customers, whether they are explicitly asking for annuities or not. Compensation-related reasons were not drivers. Other key drivers included product design improvements, increased crediting, rollup, and payout rates.

What’s on the Table Next

As we head into the new year, the table is set for continued growth. Financial professionals anticipate that favorable conditions will persist, with 64 percent expecting their annuity production to increase over the next three years.

The annuity market has reached a point where supply and demand are working together like ingredients in a well-prepared recipe — balanced and in sync:

Consumers may be more aware, more engaged, and more likely to bring up annuities in planning conversations.
Financial professionals — especially those already familiar with the products — have stepped up production.
And the products themselves are adapting, offering a better fit for today’s retirement needs.

The Final Course

Like a holiday recipe that’s come together after years of tweaking, the annuity market has found its place as the main entrée — the centerpiece of retirement planning. The ingredients are strong, the FPs are skilled, and investors are hungry for something that offers comfort, security, and future income solutions.

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