Study examines hesitancy around buying an annuity
January 31, 2024 by Doug Bailey
It’s an age-old puzzle that has stymied insurance companies, financial advisors, and investors: If buying annuities is a good option for many retirees, as some think, why aren’t more people purchasing them?
That’s what the Center for Retirement Research at Boston College recently asked in a new report titled “How Much Do People Value Annuities and Their Added Features?” Its findings, while perhaps not surprising, should raise serious concerns for insurers trying to market such products, and for potential buyers.
Wink’s Moore on the Market:
If buying annuities is a good option for many retirees, as some think, why aren’t more people purchasing them?
“It could potentially be due to a lack of financial literacy or a general negative perception of the product.”
“…people may be deterred not by a lack of interest in annuities but by a lack of knowledge of the product and how to buy it.”
“… a national biennial Health and Retirement study of Americans over age 50 conducted by the University of Michigan found just 12 percent of households with financial assets over $100,000 receive any annuity income.”
Among other things [the survey] asked…if they thought it was valuable to own a guaranteed lifetime income product. More than 76% said “yes,” and almost 55% said they thought it was a good idea to buy a product that guaranteed a certain amount of lifetime income.
That sounds like an opportunity to me! -sjm