Consumers opting for life insurance variable annuities turning more to guaranteed benefits

Nov 11, 2010

Having money for the future may be why some people are turning to guaranteed living benefits in certain life insurance annuity products.

Guaranteed living benefits may be part of variable rate annuities, products that are offered from life insurance companies as an investment vehicle for consumers.

A report from LIMRA released this week noted that the second quarter of this year saw an 18 percent increase in the number of variable annuities that included a guaranteed living benefit. That, in turn, generated $20.3 billion in deferred premiums for these products.

Dan Beatrice, LIMRA Retirement Research senior analyst, said the firm believes that guaranteed living benefits should keep driving sales of variable annuities in the future.

"Guaranteed living benefits remain extremely popular in this uncertain market as consumers seek financial security for their retirement," Beatrice says.

Variable annuities may be tied to investments like stocks. While this may provide a greater chance at higher returns, it also presents more risk. As a result, consumers may opt for a guaranteed living benefit as a way to make sure they get some of their investment back.

Another life insurance product consumers may consider when investing is a fixed annuity. While this doesn't offer as great a return, it also comes with lower risks.

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