Analysts Peer Inside Minds of RILA Owners
June 12, 2025 by Allison Bell
Clients who buy registered index-linked annuities may be a surprisingly simple group of people.
They seem to cling to their RILA contracts with a tight grip to avoid paying surrender charges during the surrender charge period.
Once the surrender charge period is over and the shock of shifting to new contract terms hits, RILA owners may be quick to give up their RILAs for something that pays a higher rate.
Wink’s Moore on the Market: I have some observations about this experience study by Milliman.
1. The analysts started with just 3.4 million contract-years of RILA exposure from seven issuers, for 2007 through 2024. Rates were relatively-unattractive on many products, during the bulk of this period.
2. Were contracts with GLWBs excluded from the study? This would greatly impact the amount of lapses, at the end of the surrender charge period, when measured against indexed annuities and variable annuities (which have rider election rates nearly 3/4 of total sales).
3. A HUGE reason that consumers cash-in, or roll-over, their fixed and indexed annuity contracts, once surrender charges expire, is that most carriers drop the inforce rates on the contract at this time. -sjm
