This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Inflation Fears, Legislation Could Boost Annuities

NEW ORLEANS ( TheStreet) -- Supporters of annuity plans, who often bill them as "personal pensions," are touting their recession era durability and pushing for federal tax breaks they say will advance their adoption.

The economic downturn seems to have had no ill effect on the immediate annuity market, which saw sales increase 30% in 2008, even as financial markets crashed.

"It is the only segment of the annuity market that grew last year and that will continue," says Craig Hemke, president and founder of, a site where users compare and buy plans.

Concerns about rising prices and the diminished buying power of the dollar are helping to shape new annuity products, including offerings with payments that adjust for inflation, rather than the traditional Cost of Living Index.

"An adjustment that somewhat approximates inflation could be valuable for someone who is worried about it," Hemke says. "At the end of the day, the number one choice of immediate annuities is still 'life only' or 'fixed.' People just want as much income as they can."

Other products go beyond "life only" plans to ensure a benefit for beneficiaries.

"The other [option] is the cash refund ," Hemke says. "It's a way of protecting beneficiaries with a lump sum. If you put $10,000 in this annuity and died after only getting $10,000 out in income, the insurance company gives your beneficiary $90,000."

Who are the people relying on annuities?

A recent survey by the Gallup Organization and the Committee of Annuity Insurers (CAI) says that eight out of 10 annuity owners have annual household incomes that are less than $100,000. Nearly half have household incomes that are less than $50,000.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HIG $44.38 0.00%
LNC $43.45 0.00%
MET $45.10 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs