Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

Fixed Annuity Sales Up 90% in Q4 2008 over Q4 2007 and Up 60% Calendar Year 2008

According to Beacon Research Fixed Annuity Premium study of 53 insurance companies representing 86% of the market, U.S. sales of fixed annuities were up 60% in 2008. Surprisingly in the 4th quarter of 2008, at the height the financial crisis and bad press, in which a number of large insurers were downgraded by rating agencies, Q4 results were estimated at 90% above Q42007 and 23% higher than Q3 2008. Beacon reports that fixed annuity sales were the strongest since they began the study in 2003.

The study includes immediate annuities (income annuities) but DOES NOT include structured settlements. The study shows that the public generally has faith in insurance companies despite the negative financial press concerning AIG, Hartford, Conseco and others.

Sales of FIXED Annuities Through Banks 80% GREATER in Q3 2008 Than Q3 2007 and 4% GREATER Than Q2 2008

Beacon Research, an independent research organization and application service provider, supplying fixed annuity product information with search and reporting tools to banks, TPMs, insurance companies and other subscribers has information that may be surprising to some of the doom and gloomers.

Some of the Top 11 names Q3 2008 may surprise you

1. AEGON/Transamerica

2. AIG Annuity Insurance Company  (+11.1%)

3. New York Life Insurance Company

4. Principal Financial Group   (+6%)

5. Allstate Financial

6. Genworth Financial Companies (-9.1%)

7. Jackson National Life

8. Western and Southern

9. Sun Life Financial  (+9.5%)

10. John Hancock Life  (+5.3%)

11. Hartford Life Insurance Company (-11.1%)

According to the company press release, Jeremy Alexander, CEO of Evanston, IL based Beacon Research said "Bank sales of fixed annuities began to improve in fourth quarter, 2007 and have grown explosively ever since relative to the same period in the prior year," said  "Throughout 2008, we've seen double-digit growth in sales of all product types except indexed annuities. Conditions improved in third quarter. The yield curve spread widened, giving fixed rate annuities a competitive advantage over bank certificates of deposit, and credited rates were higher for most of the quarter. Given the current interest rate environment, fourth quarter's bank sales should be even stronger. But we'll see another increase only if risk-adverse bank customers continue to feel safe entrusting their money to the life insurance industry despite the well-publicized problems of some companies."

TIAA Chief Investment Strategist "Invest in Low Cost Guaranteed Annuity"

by John Darer CLU ChFC CSSC RSP

In  Friday's Denver Post online  P. Brett Hammond, managing director and chief investment strategist for TIAA-CREF Asset Management tackles the home mortgage meltdown and the effects on the stock markets and other credit markets.

In his conclusions he states:

"Individuals can look to their own portfolios to reaffirm or adopt a long-term investment plan that features broad diversification, low expenses and consistent rebalancing rather than trying to predict when various investments might go up or down. Individuals nearing retirement may consider investing a portion of their savings in a low-cost guaranteed annuity that can provide a floor of income they cannot outlive.These steps can help insulate individuals against continued gyrations in the markets".

For both tort victims and their attorneys, a structured settlement annuity can provide foundational level of guaranteed income that they cannot outlive.

LIMRA... "46% Jump in Fixed Annuity Sales" Q2 2008

Life Insurance Market Research Association (LIMRA) reports that overall individual-annuity sales grew 4% during the second quarter, buoyed by a spike in fixed-annuity sales. LIMRA states that U.S. individual-annuity sales grew to $68.4 billion during the second quarter, up from $65.7 billion, with a large portion of the growth from a 46% jump in fixed-annuity sales, including immediate annuities, structured settlements and deferred annuities.

Fixed-annuity sales reached $26.2 billion for the quarter and $47.6 billion year-to-date as of June 30.

The contractual guarantees inherent in structured settlements, Single Premium Immediate Annuities (SPIA) and other deferred annuities, such as defined benefit annuities/deferred income annuities are attractive as an investment alternative. For more on Structured Settlements Compared to Investment Alternatives click the highlighted title to the left.

Given the current volatility it is not surprising that variable annuities are down 12%.

Notable is that banks moved the most product among the distribution channels, selling $25.8 billion in annuities year-to-date, a 31% increase.

LIMRA's U.S. Individual Annuities study, authored by Dan Q. Beatrice "reports industry annuity sales and net flows on a quarterly basis. Sales are tracked for a comprehensive range of annuity product types such as variable annuities, fixed deferred annuities including indexed annuities, market value adjusted annuities, and book value annuities, as well as immediate annuities and structured settlements".

4structures.com, LLC has the resources to assist you with many types of fixed annuities such as:

• Structured Settlement Annuities for income tax free structured settlements
• Defined Benefit Annuities
• Deferred Income Annuity
• Structured Installment Sales
• Terminal Funding
• Funding Agreements
• Non Qualified Structured Annuities for tax deferred structured settlements

For more information call toll-free 888-325-8640

Annuities Growing Popularity-Fixed Annuities Growth Exceeds Variable For First Time in 2 years

by John Darer CLU ChFC CSSC

Some very positive news about annuities. For the first time since the Q3 of 2006, fixed annuity sales growth EXCEEDED variable annuity sales growth, according to the Life Insurance Market Reaserach Association (LIMRA).

Driving factors cited by LIMRA include:

• Short-term interest rates on CDs declined sharply in Q1 of 2008 while the average interest rate on one-year fixed annuities, including any bonus, experienced only a slight decline. This improving interest rate spread, coupled with a volatile and declining equities market, made fixed annuities an attractive option in Q1 2008,

Total fixed annuity sales continued to grow. In Q1 2008 improved to $21.3 billion, up 31% compared to the Q1 2007. LIMRA includes the following in the fixed annuities category (book value, indexed, and market-value adjusted annuities) and immediate annuities as well as structured settlements.

• Fixed deferred annuity sales jumped 34% to $18 billion
• Fixed immediate sales jumped 21% to $1.7 billion
• Structured settlements jumped 7%, reaching $1.6 billion.

Variable annuity sales slowed compared to the sales growth over the last two and a half years, rising only 1% over the Q1 2007, reaching $42.1 billion, likely due to the uncertainty in investment markets.

Perhaps 2008 is the year that the structured settlement industry breaks its duck and pushes through the plateau in sales.

• An increase income tax rates in America will not only make existing structured settlements more valuable but will make structured settlements more valuable to enter into. It will also help new structured celebrity endorsement fee sales, and other "non qualified structured settlement" or "non qualified assignment" sales as well as deferred income annuities or defined benefit annuities
• An increase in capital gains rates (as Obama is proposing) would make structured installment sales annuities more attractive.
• An increase in interest rates will make structured settlements more attractive as people will appreciate getting an attractive rate without the market risk.