Who are the biggest immediate annuity buyers?

The answer: women.

According to LIMRA’s Guaranteed Income Annuities report released on Monday, women buy six of every 10 immediate annuity contracts, a significant chunk of the $250 billion annuitization market.

To compile the report LIMRA examined over 55,000 immediate annuity contracts issued in 2008 and 2009 to help companies better understand and customize their products to target specific markets.

Other interesting facts in the report: The average age of those who purchased immediate annuities is 73. When immediate annuities were bought with pre-tax money they were more likely to be purchased at the onset of Social Security benefits or IRS required minimum distributions. The average immediate annuity premium was just over $107,000. Seven out of 10 immediate annuity buyers purchased lifetime guaranteed income contracts. Nine out 10 lifetime income annuity buyers chose payments that were guaranteed for a specific period of time or offered a refund guarantee that enabled beneficiaries to recoup some or all of any remaining premium.

“One of the biggest obstacles for potential clients to buy an immediate annuity used to be fear of losing control of their money,” said Matt Drinkwater, associate managing director, LIMRA retirement research, in a statement.  “Today, our research shows it’s not an all or nothing decision. Two thirds of the contracts allow annuitants to convert a portion of remaining payments to cash, if necessary.”

Having this kind of flexibility is important to retirees. ¦Affluent Americans are so concerned about not having enough money on hand for emergency expenses that they are putting their retirement savings at risk by keeping money in low-yielding products, such as savings accounts, CDs and money market funds, according to a new poll titled Money on the Sidelines, which was released last week by MetLife. Fifty-eight percent of investors with $200,000 or more in investable assets cited emergency expenditures as the main reason they kept a portion of their retirement savings in liquid accounts.

This tug-o-war between liquidity and retirement needs are a real worry for investors. Having annuities that allow individuals flexibility are key to increasing sales of these products.

Meanwhile, LIMRA found that 93% of income annuity contracts have no automatic payment increase, although the firm believes the demand for inflation-protected guaranteed payouts will increase as more retirees continue to live longer.

LIMRA anticipates that annual fixed immediate annuity sales will increase to over $12 billion by 2014.