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Sales of fixed annuities fall in third quarterPosted On Mon, November 23, 2009
A recent report shows that the sale of fixed annuities saw a drop in the third quarter.
Beacon Research's Fixed Annuity Premium Study showed that fixed annuities were estimated at $21.9 billion during the quarter. Sales for the quarter were down by 21 percent when put up against sales in the third quarter of 2008 and the quarter prior.
However, total sales for this year are estimated to be at $84.5 billion, which is 16 percent higher than 2008's first three quarters.
The top three companies when it comes to sales were New York Life, Allianz Life and Pacific Life.
Jeremy Alexander, CEO of Beacon Research, said the results show that consumers were in a "conservative mood," and that sales did not fall because of a drop in demand.
"But, we don't expect to see growth in sales until rates begin rising and it becomes more profitable for companies to issue fixed annuities sometime next year," Alexander said.
Unlike the variable type, fixed annuities are not tied to the stock market. As a result, they offer smaller returns, though they are a less risky option than variable annuities.
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