Private equity firms and hedge funds are stepping up investments in the indexed-annuity market, in the expectation that they can earn greater returns than typical insurance investment strategies. Some brokers worry that these companies' investments in the low-interest rate environment will not be able to support some product features, such as promises made on income riders. Indexed annuities sales through the third quarter of 2013 have risen 6% year-over-year to $25.4 billion, according to LIMRA.

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