To the list of oxymorons that includes “jumbo shrimp” and “deafening silence,” advisors can add another: “deferred immediate annuity.”
Immediate annuities increasingly are known as income annuities, which conveys the benefit to investors. Deferred income annuities (DIAs), in which a client buys now and pockets a set amount of cash flow in the future, are gaining ground. According to LIMRA, DIA sales reached $555 million in the third quarter, an increase of 106% from last year’s period; in the first nine months of 2013, DIA sales grew 132%, to $1.5 billion, and are on pace to surpass $2 billion by the end of the year, which would double 2012 results.
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