June is Annuity Awareness Month. There’s never been a better time to shine a light on how annuities can allow anyone to create their own guaranteed pension.
Many Americans already see the light. Annuity sales in the first quarter of 2023 were the highest quarterly sales ever.
But many others remain in the dark. Indeed, 50% of people in a recent Morning Consult survey for ACLI were not familiar with a guaranteed lifetime income product that pays out like a pension.
Very few companies offer traditional lifetime pension benefits to new employees. But with an annuity, a worker can establish their own stress-free income stream like a pension.
An annuity is a contract between a consumer and a life insurance company. The consumer pays the insurer, which then pays the consumer per the terms specified in the contract.
Stringent state and federal consumer protections regulate annuity transactions. In the past three years, 38 states have adopted new laws or rules that incorporate the enhanced consumer protections in the National Association of Insurance Commissioners updated model regulation on annuity transactions, which aligns with the Securities and Exchange Commission’s Regulation Best Interest. Several other states are working on adopting this measure.
These state and federal efforts protect small- and moderate-income savers including under-resourced communities, unlike a fiduciary-only approach advocated by some that would eliminate the option for folks without the means to hire a fiduciary to work with financial professionals compensated on a commission basis.
The Morning Consult survey showed that 91% of respondents prefer the option to work with any type of financial professional who is offering products and services that meet their needs.
The survey also showed that 73% of people are interested in purchasing a guaranteed lifetime income product that pays out like a pension, including 87% of Hispanic retirement savers.
Which brings us back to Annuity Awareness Month, and why it is so important this month – and every month – to illuminate how Americans can obtain guaranteed lifetime income. America’s life insurers support plans and policies that enable all Americans to have access to information about more savings options, including annuities.
(To learn more about annuities, join ACLI’s Twitter chat on Monday, June 26, from 1-2 p.m. ET.)
Susan K. Neely was President and CEO of the American Council of Life Insurers (ACLI), the nation’s leading trade association determined to help families live better lives by achieving financial security and certainty. As president and CEO, Neely drove public policy and advocacy on behalf of ACLI’s member companies that represent 93 percent of industry assets and serve 90 million families. She is CEO Emeritus through December, 2024.
