But Annuities Get No Respect

In the world of investing, fixed-rate and index annuities are dismissed as not worthy of a savvy investor’s attention. Indeed, for some, annuities are the object of scorn. Ken Fisher, the ubiquitous money manager, uses the tagline, “I hate annuities.”

For the traditional stock-picking stockbroker, fixed-rate and index annuities are dull fare, and limit the client’s upside. Many advisors believe that an investor is better off being “in the market” to take advantage of long run growth opportunities, instead of in a product that constrains the growth in an investor’s portfolio. Of course, annuities are also considered “dead money,” assets locked up for a few years that can’t be churned into another commission generating vehicle.

Fixed-rate and index annuities get no respect.

Asset allocation theorists debate the role of annuities in an investment portfolio, but perhaps the most important reason to respect fixed-rate and index annuities is the impact they have on their owners. Less than one-fourth of all US households report being very confident about their financial future, and 15% are not at all confident. But owners of fixed-rate annuities are much more confident, and only half as many express no confidence. And more than 4 of every 10 index annuity owners are very confident about their financial future, while no index annuity owners surveyed expressed no confidence.


Source: 2018-2019 MacroMonitor (Consumer Financial Decisions Group, Strategic Business Insights


Yet annuities get no respect.

This Highlighter is from a new study – Fixed-Rate and Index Annuities Get No Respect –conducted by Kehrer Bielan Research & Consulting, and sponsored by Eagle Life. The analysis is based on the latest MacroMonitor, a nationally representative survey of 4100 households, conducted in 2018 and published in 2019. This gold standard of consumer financial surveys has been conducted every other year since 1978 by the Consumer Financial Decisions Group of Strategic Business Insights, formerly SRI Consulting. Click here for your complimentary copy.


About Eagle Life

Eagle Life Insurance Company is a provider of fixed and fixed index annuities marketed through broker-dealers and banks. The company is a wholly-owned subsidiary of American Equity Investment Life Insurance Company®, headquartered in West Des Moines, Iowa. Eagle Life is committed to providing products with integrity as well as superior service to the representatives it partners with and their clients. Renewal rate integrity is fundamental for maintaining these relationships. We stand behind our renewal rate consistency and proudly publish our rate history. For more information, please visit www.eagle-lifeco.com