Insurers address income annuity liquidity concerns

The oft-documented and reported "Annuity Puzzle" which has come to be the preferred term in economic circles for why more of the population does not annuitize their income in near retirement when it would greatly benefit them to do so, has contributed to dismal sales of income annuities which in turn, has resulted in advisors not recommending the product.

The main concern for advisors and consumers was that along with the product comes a loss of liquidity. Now, with companies offering cash outside of their scheduled payments when an emergency or other need comes along, liquidity is coming in many different forms; from access to guaranteed payments to access to contingent life payments or payment acceleration.

All of the carriers surveyed offered traditional death benefits with their income annuities while 31 out of 39 companies offered at least one type of death benefit that provided additional money upon the annuitant's death as a payout option.

All of the top 10 companies offer Cost of Living Adjustment options that allow retirees to receive increasing income in order to address concerns about inflation.