Did You Know?
- That, as of the first quarter 2011, the combined net assets of U.S. variable annuities were valued at nearly $1.6 trillion, an 11% increase from first quarter 2010 and the highest level ever recorded?
- In 2010 fixed annuity assets were valued at $659 billion a 6% increase from 2009?
- That in 2010, the total average expense difference between variable annuities and mutual funds was 1.01%?
- In 2011, the contribution limits range from $5,000-$6,000 for an IRA, $16,500-$22,000 for a 401(k) and $200,000 plus for a non-qualified annuity?
- That the average number of funds per variable annuity contract was 50 in 2010, of which 47% of assets were invested in equities, 11% in bonds, and 20% in fixed-rate accounts?
- That the guaranteed lifetime withdrawal benefit was offered on 79% of variable annuities in 2011 and was elected by 65% of contract holders?
- Boomers who own annuities have a higher confidence in retirement expectations, with 92% believing they are doing a good job in preparing for retirement?
High-Level Professional Resources
IRI Exclusive Research: Investor Demand for a VA Summary Prospectus Remains Strong
Ninety-five Percent of Investors Would Prefer to Receive a Shorter Paper Summary Prospectus
WASHINGTON, D.C. - The Insured Retirement Institute (IRI) today announced the findings of the IRI 2012 Summary Prospectus Survey. Conducted for IRI by Cogent Research, the results show that investor demand for a variable annuity (VA) summary prospectus remains strong, with 95 percent of investors demonstrating a preference for a shorter paper summary prospectus. In addition, 59 percent of investors stated that having a short summary prospectus written in easy to understand language would have a positive impact on their decision to consider a variable annuity as part of their investment portfolio.
"IRI research consistently shows that investor demand for brief and easy-to-read variable annuity investment detail remains high, and this new research strongly underscores this desire," said IRI President and CEO Cathy Weatherford. "At the same time, we are now seeing a decline in the number of investors who state they actually read the full prospectus. Rather than provide consumers with relevant investment information, the sheer length of the full prospectus has created a barrier to investor education. As an industry, we are committed to ensuring that consumers have access to educational resources that can help them make informed investment decisions. We believe the time is now to allow the variable annuity summary prospectus into the marketplace."
Among the other key research findings:
Only 17 percent of individuals report reading any part of the full prospectus in 2012. This represents a 5 percent decline from 2011, when 22 percent reported they read the 150-300 page prospectus.
- Among the small percentages of individuals who stated they did read the prospectus, only 7 to 16 percent of the document is being read.
- Most individuals do not refer back to the prospectus after they have purchased a variable annuity. In fact, 90 percent of individuals state they never or rarely use the prospectus to answer questions about their VA.
To access the IRI 2012 Summary Prospectus Survey key findings document that was released at IRI's Government, Legal and Regulatory Conference, please click here.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is a not-for-profit organization that for twenty years has been a mainstay of service, commitment and collaboration within the insured retirement industry. Today, IRI is considered to be the authoritative source of all things pertaining to annuities, insured retirement strategies and retirement planning. IRI proudly leads a national consumer education coalition of nearly twenty organizations and is the only association that represents the entire supply chain of insured retirement strategies: our members are the major insurers, asset managers, broker dealers and more than 150,000 financial professionals. IRI exists to vigorously promote consumer confidence in the value and viability of insured retirement strategies, bringing together the interests of the industry, financial advisors and consumers under one umbrella. IRI's mission is to: encourage industry adherence to highest ethical principles; promote better understanding of the insured retirement value proposition; develop and promote best practice standards to improve value delivery; and to advocate before public policy makers on critical issues affecting insured retirement strategies and the consumers that rely on their guarantees. Visit www.IRIonline.org today to experience the vast resources of the Insured Retirement Institute for yourself.
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