In the US, 77 million baby boomers of the 1940s turned 63 –their desire to beat inflation and to secure a steady post retirement income may have spurred the Variable annuity market.
The market for the Variable Annuity-a contract with an insurer to channel your funds into investment options like shares and bonds and get higher but variable returns-is attracting quite a few customers.
The Variable Annuity allows you the freedom to choose how to invest in specific share or bonds and choose the best option to maximize your future income.
What is the size of the US market and other markets in the world?
NAVA reports reveal that The US recorded sales of USD 182 billion resting on a net asset growth (NSG) of USD 1.5 trillion. In contrast, the newer Japanese market registered sales of USD 49 billion on an NSG of USD 120 billion. In the UK sales topped USD 15 billion.
What need does it meet?
Variable Annuities satisfy the needs of customers desiring higher income earning potential; they are for customers who take higher risks to get higher returns; they offer greater elasticity in linking an individual’s surplus funds to investment options today that result in a steady benefit tomorrow!
What is the projected growth of the market in US and internationally?
Presently, USD $800 million is being transferred from savings to variable annuity schemes per day and more than $200 billion in sales will be generated, in US alone, annually. The Japanese market is projected to reach $350 BN in assets this year. Europe’s aging population is growing; they are well off with high income lifestyles that are a beacon for protected investments projected to grow to USD 45 billion.
What will drive the growth?
In US, senior citizens are estimated to grow from 12.20% to 16.20% of the nation’s population by the year 2020.The aging of the population will create new niches for retirement planning. Government policies withdrawing, curtailing funding for medicare and social security will also drive up the popularity of variable annuities.
Companies are creating consumer friendly products that will boost market growth. The high charges of variable annuities will be pegged down; flexibility in designing will create innovative and better products that can compete with cheaper social security, employee pensions and mutual funds. heir benefit clauses will be added to sweeten the contracts. stronger investment guarantees will offer better protection to the consumer from high inflation and volatile stock markets.
I invested $ 93000 in variable annuities bestowing living benefits; I was assured 7% annual return, provided I did not withdraw the fund during a ten year period. On maturity, my investment would have grown to $ 188, 000. I can enjoy a 5% encashment based on the account value.
It’s a great wealth enhancing tool to finance that high income post retirement lifestyle you dream about. Don’t miss out on a great opportunity. Contact an Independent Financial Adviser (IFA) now and settle your Variable Annuity contract today!