"We couldn't continue it because rates went down again," says Bruce C. Long, executive vice president of New York-based Guardian Insurance & Annuity Co.

With billions in fixed and immediate annuity payout liabilities sitting on insurers' books, there is some justifiable concern regarding individual companies' going concern value and their ability to pay your clients' life-time income. "On the fixed side, it really is a matter of planners doing the same due diligence on companies that they would do for any product," says the ACLI's Lanam.

It's also a matter of making a judgment call regarding interest rates and the fundamentals of the stock market, especially if investors have a longer investment horizon.

In fact, investors are buying annuities earlier and earlier. "Our natural market is five years before retirement to five years after, so the age ranges from 57 to 67," says Golden.

In the end, what to buy and when depends on your fundamental perspective. "If you believe in the markets, this is a buying time," says the Guardian's Long, who maintains he has made no changes in the variable annuities he owns. "I really do think there is wealth to be made in this bear market that will be realized when things get bullish again."

What Do Buyers Think?

A new survey from the American Council of Life Insurance found that of 400 immediate annuity buyers, more than 60% saw it as a good financial decision and 22% saw it as one of the best financial decisions they have ever made. Only 4% saw it as a poor financial decision, according to the survey, which was conducted by Matthew Greenwald and Associates/National Research in December, 2002. As interesting, 58 % of immediate owners say their household owns multiple immediate annuities. Not surprisingly, the biggest motivator for the purchase is regular retirement income (48%). Who do buyers turn to? Insurance agents lead the pack (57%), followed by financial planners (42%) and stockbrokers (41%).

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