Market Overview/Typical Purchaser
The average age of owners of non-qualified annuity contracts is age 651. One-third of the owners of non-qualified annuity contracts (35%) are age 72 and older1. Twenty-eight percent (28%) of the owners of fixed annuities purchased their first annuity under the age of 50, while 52% of the owners of variable annuities purchased their annuity under the age of 501. In general, the fixed and the variable annuity offer some of the same benefits to consumers. Both help a consumer
1) accumulate dollars for retirement, 2) receive tax-deferred accumulation, 3) offer a potential stream of income, 4) receive probate advantages, and 5) gain access to their money. In essence, the major difference between the two could be the owner’s current tolerance for risk and/or the number of years before retirement and/or their current portfolio. Or, said in a different way, the owner of a variable annuity can choose from a wide choice of investment options while the owner of a fixed annuity cannot.
Almost 91% of annuity owners still own the first annuity that they purchased1.
In the chart below, we outline the basic differences between both products.
