Some variable annuity buyers put more cash in during the second year that they own the contract.
About 5% to 6% of the owners of contracts with guaranteed lifetime withdrawal benefits add premium deposits during the second contract year, according to a team of analysts from LIMRA and the Society of Actuaries Research Institute.
For owners of variable annuities with GLWB riders, the percentage who took withdrawals increased to 44% in 2021, from 37% in 2019.
The LIMRA and SOA team put those findings in a new report on what U.S. individual variable annuity holders really did with their annuities from 2019 through 2021.
What it means: Typical clients may find it easier to take cash out of an annuity than to put more money in.
The study: The LIMRA/SOA team based the new report on data from 15 companies with 10.5 million contracts that could be surrendered, $1.4 trillion in contract value that could be surrendered, 3.7 million withdrawals of cash from annuity contracts and $41 billion in contract value withdrawn.
The report includes data on annuities with no living benefit guarantees and guaranteed minimum income benefits, as well as those that let owners take cash out through guaranteed lifetime withdrawal benefit riders.
