Recent interest rate shifts may be decreasing consumer interest in contracts with relatively short, 1-year rate guarantee periods.
Buyers of both book value fixed annuities and market-value adjusted fixed annuities seem to be moving away from 1-year guarantee periods, according to Beacon Research Inc., Evanston, Ill.
Overall FA sales dropped 18% between the fourth quarter of 2004 and the fourth quarter of 2005, Beacon estimates.
In the book value FA market, contracts with 1-year guarantees accounted for 85.7% of sales in the fourth quarter of 2005, down from 87.9% in the fourth quarter of 2004.