What Are the Biggest Trends in Annuities

Several trends have emerged as the annuity market has evolved in recent years. Fox_Ana/Shutterstock

An annuity is a financial product that provides an income stream to supplement a retiree’s income over time. However, as the financial landscape evolves, so do annuities’ features, benefits, and overall appeal.

Several trends have emerged as the annuity market has evolved in recent years, catering to new customer preferences and adapting to changing economic conditions. As such, there are several major trends in annuities today, and this article examines how these changes impact investors and the broader financial industry.

1. Rising Popularity of Fixed Index Annuities

One of the most notable trends in the annuities space is the increasing popularity of fixed index annuities (FIAs). According to research organization LIMRA, fixed-rate deferred annuities have more than tripled in the last two years, rising to $164.9 billion by 2023. This is in part due to traditional sources of retirement income. Often, employer contributions, Social Security benefits, pensions, and other investments cannot provide sufficient and consistent retirement income.