A report says borrowers looking to invest their life insurance policy in annuities gradually moved away from guaranteed living benefits during the first quarter of 2011.
Data from LIMRA showed that consumers took advantage of the guaranteed living benefit component of a variable annuity 86 percent of the time during the first three months of the year, reports Employer Benefit News. That was down from a peak 90 percent during the same time period in 2009 and represented the lowest quarterly rate since 2008, said the report.
Confidence in the stock market appears to be on the upswing, said the report, meaning more people investing in their life insurance are content to pass on guaranteed living benefits. Even so, at 86 percent, the rate remains historically high, well above the 75 percent mark posted in 2006.
"So, the guarantees remain popular after witnessing two dramatic downturns in one decade, but the popularity has slipped from the mid-crisis peak," said Dan Beatrice, senior analyst, retirement research with LIMRA, according to the source.
Life insurance policyholders investing in an annuity can elect to receive guaranteed living benefits, which can be paid out during their lifetime, but they often come at a cost that's considerably higher than standard death benefits.