US individual annuity sales reached an estimated $461.3 billion in 2025, up 6% on the year, according to LIMRA. Fourth-quarter sales rose 12% to $114.4 billion — the ninth consecutive quarter above $100 billion.
The composition shift is the real story. Indexed products — registered index-linked annuities and fixed indexed annuities — accounted for 45% of total sales, against just 24% a decade ago. RILA sales alone rose 20% to $79.6 billion, roughly ten times their volume ten years ago and an eleventh consecutive year of growth.
Why Annuities Are Selling
Higher interest rates. That is most of it.
An annuity is, mechanically, an insurer taking your money and promising future payments. When the insurer can earn more on its own portfolio, it can promise more — so guaranteed rates on fixed annuities and income riders became genuinely competitive in a way they had not been since before 2008.
Layer on the demographics: the largest retirement cohort in US history is converting savings into income right now, and the disappearance of defined-benefit pensions has left a gap that annuities are the only retail product designed to fill.
What the Categories Actually Are
Fixed annuity (MYGA). A guaranteed rate for a set term. Functionally a CD issued by an insurer rather than a bank — different guarantee mechanism, often a better rate, no FDIC coverage.
Fixed indexed annuity (FIA). Principal protected, returns credited off an index subject to a cap or participation rate. Upside limited, downside floored at zero.
Registered index-linked annuity (RILA). Higher caps than an FIA, purchased by accepting a defined slice of downside — a buffer that absorbs the first 10% or 20% of loss, or a floor that limits your loss to a set amount. More upside, real risk.
Variable annuity. Direct market exposure through subaccounts, usually with an optional income guarantee layered on top at additional cost.
Income annuity (SPIA/DIA). You hand over a lump sum and receive a guaranteed income stream for life. The simplest product in the category and the smallest share of sales — which tells you something about how these are sold.
The Questions to Ask Before Signing
- What is the surrender schedule? Five to ten years is typical, sometimes longer. Money inside a surrender period is not available without a penalty, and it is the single most common source of regret.
- What are the total annual costs? On a variable annuity, mortality and expense charges, administrative fees, subaccount expenses and rider fees stack. The all-in number is frequently well above 2%.
- Can the cap or participation rate be changed after issue? On most indexed products, yes. Ask what the guaranteed minimum cap is, not the current one.
- Is the crediting on price return or total return? Almost always price return, which quietly excludes dividends.
- What is the insurer’s financial strength rating? The guarantee is only as good as the company. There is no FDIC backstop — state guaranty associations exist, with limits that vary by state.
- How is the salesperson paid? Annuity commissions run from low single digits to well above that. It is a fair question and a licensed professional should answer it directly.
The Honest Framing
Annuities solve one problem exceptionally well: the risk of outliving your money. Nothing else in retail finance transfers longevity risk to a balance sheet that can absorb it.
They are a poor vehicle for growth, a poor vehicle for liquidity, and a poor default for someone still accumulating. The most defensible use is a partial one — annuitising enough to cover fixed essential expenses alongside Social Security, and investing the remainder.
If a product cannot be explained to you in plain language in ten minutes, that is information about the product.
Source: LIMRA, via Insurance Business, “US annuity sales hit record $461 billion as indexed products surge”
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