What's Happening?
According to LIMRA's U.S. Individual Annuity Sales Survey, total U.S. annuity sales reached $461.3 billion in 2025, marking a 6% increase from the previous year. The fourth quarter alone saw sales jump 12% to $114.4 billion, continuing a trend of nine consecutive quarters with sales exceeding $100 billion. Indexed products, including registered index-linked annuities (RILA) and fixed indexed annuities (FIA), accounted for 45% of total sales, a significant rise from 24% a decade ago. RILA sales set new records, with a 20% year-over-year increase to $79.6 billion, while FIA sales grew 1% to $128.2 billion. LIMRA forecasts continued growth in these segments through 2028, driven by expanded capacity and investor demand.
Why It's Important?
The growth in annuity sales,
particularly in indexed products, reflects a shift in investor preferences towards solutions offering security and potential growth. This trend is significant as it aligns with the demographic shift of 'Peak65,' where over 4 million Americans are entering retirement annually. The demand for annuities is likely to increase as retirees seek stable income sources amidst economic uncertainties. The expansion of annuity products also indicates a broader industry effort to cater to evolving consumer needs, potentially influencing financial planning and retirement strategies across the U.S.
What's Next?
LIMRA projects that RILA sales will exceed $85 billion in 2026, with continued market expansion expected as more carriers introduce new products. However, fixed-rate deferred annuity sales may decline as interest rates drop, reducing their appeal. The industry is likely to focus on educating financial professionals and consumers about the benefits of annuities in retirement planning, potentially leading to further innovations and product enhancements.
