Following a year in which sales were flat, 2014 could be a big year for variable and indexed annuities in terms of sales and product development, according to an InvestmentNews report. “The tail winds are with variable annuities because of the shift in [capital gains] tax rates,” says one analyst. Expectations for 2014 include:
• more risk-managed investment options within annuities, either in the form of managed volatility funds or asset transfer programs;
• managed volatility funds could be a welcome addition to variable annuities without living benefits;
• more companies will enter the indexed annuity space, and indexed annuities will gain greater traction among banks and wire houses;
• carriers will ramp up their living benefits, adding features like payment checks that can increase based on interest rates; and
• product development in guaranteed-minimum death benefits will pick up, albeit slowly.
