Wait…Aren’t Fixed Indexed Annuities Evil?

 

According to all media reports and the long fought battle around the Department of Labor's new “Fiduciary Rule”, fixed indexed annuities are evil. If that's so…why are more people than ever choosing to purchase them?

Based on recently released numbers from 2016, sales of fixed annuities are on the rise. Here are some of the highlights:

  • Total fixed annuity sales for 2016–$117.4 billion, 14 percent higher than 2015
  • Fixed indexed annuity sales were up 12% to a total of $60.9 billion
  • Fixed deferred rate annuity sales $38.7 billion, an increase of 25% over 2015
  • Fixed immediate income annuity sales only grew 1% to $9.2 billion
  • Deferred income annuity (DIA) sales increased by 4% to $2.8 billion
  • Variable annuity sales continue to falter, down to $104.7 billion from their peak in 2007 of nearly $190 billion

But why would we even care? And more importantly why would you?

Opponents of fixed annuity products have been on the warpath the last few years which has culminated in the Department of Labor's “fiduciary rule”. Without getting lost in the minutiae, the thrust has been to convince the public that the only reason someone would ever buy an annuity (in particular a fixed indexed annuity) is that a crafty insurance salesperson snookered them.

Because you know, everyone who earns a commission for making a sale is evil…right?

 


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