volume , were Prudential , Brighthouse Financial and Jackson National Life .
Golembiewski explains that registered index-linked annuities tend to attract investors who are somewhat aggressive and want to participate in future potential growth in the market but who are also conservative enough to seek a measure of protection against losses . They are primarily retirees and near-retirees who may be concerned that the income from their assets won ’ t keep up with inflation , and at the same time are worried about a major market correction . LIMRA data indicates that RILA buyers are among the youngest annuity buyers ; their average age is around 61 . Broadly speaking , they tend to
be not as cautious as older retirees . They are still looking for accumulation opportunities to supplement their retirement nest egg , as well as some protection for the gains they have already made .
The range of clients who fit that broad description is vast , advisors say . Registered index-linked annuities appeal to a diverse spectrum of clients and risk / return appetites partly because they allow you to choose your underlying investment and specify your parameters for upside potential and downside protection .
“ RILAs ’ success is due to continued investor uncertainty about the economy ,” Golembiewski says . “ Momentum is growing for this product line , as distribution awareness and interest grows .”
Demographics are helping to drive sales , too , experts say . As more people reach age 65 , they seek products that can generate retirement income after they leave the workforce . Annuities are a natural fit .
“ The RILA trend will likely continue as consumers look for more certainty in their investment outcomes ,” says Matt Lemieux , a senior vice president at Jackson National Life Distributors in Franklin , Tenn . “ This continued growth will also be supported by the expanded offering of lifetime income options .”
Lifetime income options are guaranteed living benefit riders that pay a minimum amount indefinitely , regardless of market losses , for an extra fee . Many of these riders also provide for withdrawals from the annuity ’ s cash value . Typically associated with traditional variable annuities , they are a relatively recent addition to registered index-linked annuities .
Some RILAs have also started offering death benefit riders that protect beneficiaries from losses in the annuity ’ s value . Other innovations include customized
LIMRA data indicates that RILA buyers are among the youngest annuity buyers ; their average age is around 61 . Broadly speaking , they tend to be not as cautious as older retirees .
market indexes and crediting methods that enable annuitants to practically design their own product .
There are also technological enhancements . For instance , Lemieux says Jackson National has developed an online tool that gives advisors and their clients an easy-touse , customized real-time snapshot of how each registered index-linked annuity fits within an individual ’ s financial plan . The goal is “ to make RILA offerings more accessible , transparent and understandable ,” he says . The data it provides “ enables clients to generate individual , hypothetical scenarios of the various RILA options .”
Such new features and add-ons are fueling the expectation that registered indexlinked annuity sales will keep growing over the next several years , Golembiewski says . He adds that so far only about 15 % of RILA sales include a guaranteed living benefit rider , which , to him , means there ’ s space for more growth .
“ There is still more runway ,” he says . “ Further enhancing technology to improve the financial professional and customer experience will further drive utilization .”
The Results Are In
FA-MAG . COM / RIA2024
SPONSORED BY
JANUARY / FEBRUARY 2025 | FINANCIAL ADVISOR MAGAZINE | 51