Record Annuity Sales Hit $116B in Q2; FRDs Lead Amid Market Volatility
LIMRA anticipates a possible slowdown in sales in the latter half of the year but still projects 2025 could surpass $400 billion in total annuity sales. Fixed-rate deferred (FRD) annuities continue to lead with $44.2 billion in Q2 sales, appealing to conservative investors for their guaranteed rates and regular income payouts, though demand may soften with stabilizing interest rates and a strong equity market. Registered Index-Linked Annuities (RILAs) showed significant growth, hitting $19.6 billion in sales, up 20% year-over-year, driven by broker-dealer platform expansion and their balanced risk-return features.
Fixed Index Annuities (FIAs) maintained stable sales at $31.4 billion, valued for principal protection and guaranteed income, though some advisors are shifting preference to FRDs amid current rate conditions. The uptick in annuity sales reflects industry-wide efforts in educating advisors and clients on guaranteed lifetime income benefits, though LIMRA notes only one in five preretirees currently own annuities. This presents opportunities for registered investment advisors (RIAs) and wealth managers to integrate annuities into retirement strategies, particularly for risk-averse clients or those nearing retirement.
The annuity market’s growth underscores evolving client acceptance and strategic advisor positioning, enabled by product innovations, enhanced fee transparency, and broader platform access. The current market environment calls for careful client consultation to balance annuity features with overall financial goals amidst shifting interest rates and economic factors.
While fixed-rate deferred annuities have dominated recently, RILAs and FIAs remain important components of diversified retirement income planning. Industry stakeholders continue to focus on addressing gaps in guaranteed income expectations among retirees, highlighting annuities’ role within comprehensive retirement portfolios.