The other issue is that immediate annuity investors are buying a guarantee from an insurance company, meaning they are placing a bet that the insurance company will be around for a few decades to pay them.
"We had an hour-long discussion with 70 of the top advisors, and one of their biggest concerns was what the impact will be on the insurance companies, from a solvency perspective, when people start living to the age of 100," Lane says. "There's been no precedent where insurance companies, en mass, were in a payout phase. An annuitization is a general account asset. You are completely tied to the solvency of the insurance company."