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Protection Products Driving the Future of Annuities


Todd M. Giesing
Assistant Vice President, Annuity Research

July 2022

A traditional look at the individual annuity market based on product type — variable, indexed, deferred, etc. — provides companies with essential market detail. However, a more holistic view emerges when we factor in product riders as key features, and assess annuity sales based on the three major investment objectives: accumulation, protection, and income. Ongoing LIMRA research shows a significant shift in individual annuity sales based on investment objective since 2013, and indicates that the trend toward protection-based products will continue through 2025 (Figure 1).

Figure 1 — Annuity Sales Trends and Projections by Investment Objective, 2013–2026


Source: A Future View of Annuity Sales — Redefining the Future, LIMRA, 2022.


Accumulation-focused sales have remained steady until recently, as a result of:

  • Limited guarantees (usually only a death benefit option) creating a niche for investors seeking tax deferral.
  • Recent proposals for changes in tax law increasing consumer appetite for tax-deferred investing.

In 2021, fueled by the increased appetite for tax-deferred investment solutions, accumulation-focused annuity solutions experienced 32 percent growth. With the Biden administration continuing to look at tax revenue opportunities, particularly among wealthier Americans, we expect accumulation-focused sales through 2026 to continue above the levels seen prior to 2020, with the potential to expand distribution opportunities in the RIA channel. We expect the appetite for tax deferral to continue, and dependent on any tax law changes in the future this segment could grow even more than expected.


In contrast, protection-based products have risen steadily since 2013, due to:

  • Companies pivoting their strategy to focus on protection-based products and/or exiting the guaranteed income space all together.
  • Equity market volatility — such as what we saw during the pandemic — driving investors to protect their retirement savings via protection solutions.
  • Shorter contract duration and the need to move money once the contract comes due. We expect investors will use a good portion of those funds to buy additional protection-based annuities, driving future growth.

Protection-based annuity sales continued as a focal point in 2021, with sales increasing by 19 percent as Americans continued to face uncertainty. The value proposition of protection will continue to resonate with Americans seeking to balance growth with downside protection. We anticipate protection-based annuity sales will continue to grow, and exceed $150 billion by 2024.


Products with guaranteed income features made up a majority of sales in 2013, but then steadily declined until recently. This is a result of:

  • Carrier diversification of annuity sales mix to improve the risk profile of in-force business.
  • Economic conditions, especially low interest rates, hampering insurer ability to add as much value to income features prior to 2013.
  • A decrease in annuity-to-annuity exchanges, as income features purchased in the past are more robust than current offerings.

Sales of income features in annuities bottomed out in 2020 as individuals — distracted with the global pandemic — became less focused on long-term retirement planning. In 2021 — despite favorable demographics, more Americans entering retirement, and a sales rebound of 13 percent — income products remained well below pre-pandemic levels. We do expect the demand for guaranteed income to increase, especially considering there will be 8.5 million more Americans aged 65 and older in 2026 than there are today. In addition, fewer individuals will have the backstop of a pension in retirement. However, even with the expected improvement, it will take until 2024 for sales to increase above pre-pandemic levels.

Note: Accumulation products include any traditional VAs without GLBs elected or available. Protection products include any traditional VAs with GMAB riders, registered index-linked annuities, indexed annuities without GLBS elected or available, and fixed-rate deferred annuities. Income products include traditional variables, registered index-linked and indexed annuities with GLBs elected, and deferred income annuities, as well as fixed immediate annuities.