Question: It seems like annuities are all the rage. How long have annuities been around? Jimmy from Florida
Answer: That is a good question with a very interesting answer Jimmy. Ironically, my weekly annuity column on WSJ/MarketWatch kind of addresses this issue. I encourage you to take a look.
Most historians give the credit (or blame) to the Romans for introducing the world to annuities. Below are some key historical dates that you might find interesting, with the full chronological list shown in this week’s MarketWatch article.
1759: This is when annuities came to America. They were offered only to church pastors in Pennsylvania.
1812: The first time annuities were offered to the public by the Pennsylvania Company for the Granting of Annuities.
1905: Andrew Carnegie founded the Teachers Pension Fund, which in 1918 became the Teacher’s Insurance Annuity Association (now known as TIAA-CREF).
1952: TIAA-CREF introduced the first variable annuity. Yes, we can all blame them!
1995: Keyport, which is now Sun Life, introduced the first fixed index annuity. This is probably the genesis for the “bad chicken” dinner seminar as well!
2004: MetLife introduced the first longevity annuity. Great product!
Only in the last decade have annuities grown in popularity. With 10,000 baby boomers retiring every day, annuities are now a legitimate transfer of risk asset class with sales reaching $250 billion annually. There is an estimated $3 trillion of annuities that are already on the books as well. Hard to believe, isn’t it?
Most people are surprised to find out that annuities can be traced back to Roman times, and that these products have been available to the public in the United States since 1812. That’s over 200 years of annuity agents! What a horrible thought! Thanks again for the question.
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