WASHINGTON – New data from the American Council of Life Insurers (ACLI) shows that life insurers in 2023 paid out $104 billion in annuity benefits, the most ever and a 9 percent increase over 2022 benefits paid.

Only life insurers offer annuities, which is the sole financial product in the private marketplace that can guarantee lifetime income.

“In this era of economic uncertainty, life insurers are bringing financial certainty to retirees. Regardless of how long you live, a lifetime annuity keeps paying, supplementing Social Security and helping reduce reliance on government for financial assistance,” said ACLI President & CEO David Chavern.

In addition to data on annuities, the 2024 Life Insurers Fact Book includes facts and figures on life insurance, other industry products and more.

While annuity payments increased, so did the amount of money workers and retirees put into annuities for long-term savings. Premiums paid by annuity owners in 2023 totaled $361 billion, a nearly 3 percent increase over 2022.

“Traditional pensions that guarantee retirees income for life are declining. Couple that with the Peak 65 era we are in today with 11,200 on average daily reaching age 65 and it is clear why Americans are dedicating more of their savings to annuities. They want guaranteed sources of retirement income,” Chavern said.

“At the same time, interest rate increases also fueled growth in the product as life insurers were able to credit annuity owners with greater rates of return in 2023 than in previous years due to low interest rates,” Chavern added.

The Fact Book data on annuities comes out as new research by retirement experts Mark Warshawsky and Gaobo Pang shows that full or partial annuitization of savings from 401(k)s, IRAs and other savings leads to better retirement outcomes than the traditional strategy of withdrawing 4 percent annually.

“Annuities have been available for more than a century, though in many ways you could say they are finally being understood as a retirement product for most everyone,” Chavern said. For example, the Warshawsky-Pang research shows that people retiring with $250,000 or less would most benefit from annuitizing higher portions of their retirements savings, if not all of it.

The 2024 Fact Book also shows life insurance purchases and in-force coverage increased in 2023 to record levels, while life insurance death benefit payments decreased nearly 3 percent to $89 billion.

“In this time of economic uncertainty, life insurers are playing the vital role of the private-sector safety net. Life insurers are providing the tools people need for people to obtain financial independence for themselves and their families in all stages of life,” he added.

The American Council of Life Insurers (ACLI) is the leading trade association driving public policy and advocacy on behalf of the life insurance industry. 90 million American families rely on the life insurance industry for financial protection and retirement security. ACLI’s member companies are dedicated to protecting consumers’ financial wellbeing through life insurance, annuities, retirement plans, long-term care insurance, disability income insurance, reinsurance, and dental, vision and other supplemental benefits. ACLI’s 275 member companies represent 93 percent of industry assets in the United States.

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American Council of Life Insurers  | 101 Constitution Ave, NW, Suite 700  |  Washington, DC 20001-2133