Bryn Mawr, PA, December 5, 2005 - American consumers are
expected to more than double the sales of existing tax-deferred
annuities they hold in 2006, as the economy moves into what
appears to be a transition phase in which liquidity will be
valued over illiquid holdings, according to J.G. Wentworth. As a
result, the company said, sales by consumers of existing
annuities are likely to hit a three-year high next year even as
the annuities market itself continues to grow. "Based on the
public data we've seen as well as proprietary information from
agents and brokers active in this market, 2006 is likely to be a
watershed year for sales by consumers of annuities they
purchased, often in very different economic environments," said
Michael B. Vaughan, managing director of the J.G. Wentworth
Annuity Purchase Program™. "There are, according to industry
estimates, more than $1.6 trillion of assets backing annuities
in the U.S. alone. We estimate that 5-10%, or $80-160 billion,
of those annuities are in the hands of consumers who would sell,
in any given year, if they could." Vaughan pointed to the
following five factors as supporting J.G. Wentworth's
assumptions:
-- Liquidity matters in a changing economy. Consumer confidence,
and optimism about more liquid investments like stocks and real
estate, remains high.
-- Investment needs change. Changes in investment strategy or
goals, or even just life changes like illness or divorce, often
force hard reviews of existing assets and investment decisions.
Unexpected medical problems can also be a factor.
-- Buyer's remorse is real. In fact, according to a 2003 survey
of immediate annuity owners by the American Council of Life
Insurers (ACLI), more than a quarter of respondents (27%) were
"concerned they may be unable to sell their annuity if they want
the money for something else" and 4% believe the decision to
purchase an annuity was a poor one.
-- Annuity ownership can complicate estate planning and wealth
transfer. The inheritance of an annuity, where there is
significant divergence between the financial objectives of the
original annuitant and the heir, can create issues.
-- Even the "experts" don't advise annuity ownership for all.
The Motley Fool, a leading personal finance media company, said,
"Annuities by and large: are too expensive, offer mediocre
insurance coverage, restrict the owner's investment choices to
so-so, ho-hum, quasi-mutual fund subaccounts...and lack
liquidity." Vaughan added, "Tax-deferred annuities have been a
valuable personal finance tool for many consumers and offer the
benefits of stable, secure and guaranteed income.
Unfortunately, annuities can also become a very inflexible
solution for many consumers when they face the need to review
estate planning or investment goals, or simply realize that
their life circumstances have changed."
About J.G. Wentworth J.G. Wentworth, the sponsor of the Annuity
Purchase Program™, is the nation's oldest, largest and most
respected buyer of annuities. For more than 14 years, J. G.
Wentworth has been purchasing annuities as well as other
deferred payment streams. During this time, the company has
purchased over $2 billion of future payment obligations. The
company's annuity-backed notes are rated AAA by Standard &
Poor's and AAA by Moody's and sold to institutional investors.
J.G. Wentworth is based in Bryn Mawr, PA. For more information
about J.G. Wentworth and the Annuity Purchase Program, go to www.jgwfunding.com/annuities.asp. # # #
About the author:
This article submitted by DMi Partners, the itneractive
marketing agency representing JG Wentworth.
Written by: Jenna Focarino, Miller DeMartine Group
Bad Credit Refinance Loans - Finding a Good Lender
Finding a good lender to help you with refinancing your home loan can be tricky if you have bad credit. There are plenty of predatory lenders out there who would like to take advantage of you with excessively high interest rates and fees. The key to...read more
Best Finance Guide
Imagine you need to look great to get all the attention at the biggest party of the year. The cloak has already started ticking and you have got 7 days to fix yourself for the D-Day. If you can take out 15 to 30 minutes in the next few days, you...read more
How To Choose The Right Havanese For You!
The sweet, playful expression of the Havanese has caught your
eye. You are hooked by their fluffy fur and affection. You
excitedly scope the classifieds and internet for a Havanese
breeder. You can't wait to bring home a new puppy today!
...read more
Student Loans And Finances - Life As A Cash Strapped Student
It can be the best time of your life, or the worst depending on how you aproach what life deals you as a university student. For most of us heading off to college or university is the first time we've ever been away from home for any long period of...read more
Tips on How to Refinance
Tips on How to Refinance Refinance Mortgage Loan Getting a refinance mortgage loan is a smart move for any homebuyer. This is especially true if the interest rates are low. In the world of finance, interest rates directly affect the way...read more
J.G. Wentworth Forecast:Consumers Expected to Increase Sales of Annuities They Hold in 2006, Continuing 3-Year Trend in Personal Finance
