Life Insurance Quotes

GAO says understanding annuities can benefit middle class

08/30/11

Despite the fact that annuities often get harsh treatment from government based and independent analysts, in recent years, several agencies have bucked the trend to some extent, noting that annuities are, in many cases, an important part of a comprehensive retirement package, according to the Cincinnati Enquirer.

A recent Government Accountability Office report noted that despite an occasional public aversion to annuities, citizens should be aware that Social Security, the largest source of income for most seniors, is a form of a fixed life annuity. The GAO also stated that some form of fixed annuity income reduces longevity risks for seniors, and annuities best serve members of the middle class - the middle 40 percent of earners - who stand to benefit from the purchase of an annuity that secures a payout for life.

According to the Insurance Information Institute, total annuities sales in the United States saw a bit of a decline between 2008 and 2010, with an aggregate downturn of 17.3 percent. Recent figures released in an Insured Retirement Institute report, however, note an upturn in 2011, as annuities sales have increased by more than 10 percent in the first two quarters year-over-year between 2010 and 2011.

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