Annuity sales have now topped $100 billion for 10 consecutive quarters, continuing to gain momentum as more Americans prepare for retirement. According to LIMRA, U.S. retail annuity sales finished 2025 at a record $464.1 billion, marking the fourth consecutive year of record sales. Additionally, indexed products, including Fixed Indexed Annuities (FIAs) and Registered Index Linked Annuities (RILAs), accounted for approximately 45% of all annuity sales, indicating a growing demand for solutions that balance growth potential with downside protection.
This upward trend is the result of a combination of factors. For example, the retirement landscape today looks a lot different than it did a generation ago, as more Americans are entering retirement without a traditional pension. Instead, they’re turning to their personal savings to generate income, making solutions that balance protection with growth potential more appealing.
But not all annuities are the same. They come in many forms and are designed to meet different financial goals and risk preferences. Three of the most common are FIAs, RILAs, and VAs, which can be purchased with both qualified and non-qualified funds.
Fixed Indexed Annuities (FIAs): FIAs are a contract, not an investment. They use a market index like the S&P 500, to determine interest credited, subject to contract limitations such as caps, spreads, and participation rates. With an FIA, a client’s principal is 100% protected from market losses by contract, and a new principal “floor” is created after every interest crediting period. Some FIAs also offer optional lifetime income benefits for retirement. FIAs are generally suited for those seeking safe growth potential along with principal protection from stock market downturns.
Registered Index Linked Annuities (RILAs): Introduced in 2010, RILAs track a market index but involve more investment risk than FIAs, letting clients share in market gains with a cap and partial downside risk. Clients can choose between a buffer (the insurer absorbs losses up to a specified percentage) or a floor (client absorbs losses up to a predetermined amount), and a client must be provided with a prospectus to invest. This option is usually best suited for clients who are comfortable with stock market risk.
Variable Annuities (VAs): Variable annuities allow clients to invest in professionally managed subaccounts that function similarly to mutual funds. They offer significant growth potential but provide no protection from stock market losses, and a client must be provided with a prospectus to invest. Contract values can increase or decrease based on investment performance, and optional riders can add lifetime income benefits at an additional cost.
As retirement planning continues to shift from simply accumulating assets to creating reliable retirement income, annuities have become an increasingly common topic in conversations advisors are having with their clients. As with any financial solution, the right solution depends on each client’s goals, risk tolerance, income needs, and unique situation.
Call Quantum at 800.440.1088 to explore annuity solutions for your client with qualified or nonqualified assets. We’re happy to run case designs tailored to your clients’ goals and planning needs.
Sources:
https://www.investmentnews.com/life-insurance-and-annuities/annuities/266907
https://annuityjournal.org/newsroom/annuity-sales-461-billion-2025-limra/
https://www.annuityexpertadvice.com/comparisons/rila-vs-fia-vs-va/
With almost 15 years in the financial services industry, Kyle has become one of the top consultants in the industry. His passion is helping advisors grow by leveraging their strengths and helping them improve on any areas of weakness.
