Guaranteed living benefits still drive the variable-annuity market, despite rising costs and downward adjustments on some of those benefits’ guarantees, according to the latest report from LIMRA.

New annuity buyers elected to add guaranteed living benefit riders to their policies 87% of the time in the first quarter, down slightly from last year’s annual election rate of 89%.

“It’s been remarkable that it’s stayed so high,” said Dan Beatrice, a senior analyst at LIMRA in Windsor, Conn. “I’d expect clients are still looking for some sort of backstop against a market drop off. GLBs are evidently still a strong sales pitch.”

At 64%, most clients bought guaranteed lifetime withdrawal benefits, a type of guaranteed living benefit.

“That’s a dominant rider, extremely high in new sales,” Beatrice said . “It appears that raising prices and adjusting benefits hasn’t had a significant effect on sales.”

New contracts totaled $19.8 billion in the first quarter, and $17.2 billion of that was invested in variable annuities with GLB riders.

All together, variable annuities with GLBs represent $440 billion in assets, up from $411 billion at the end of last year. Total variable annuity assets grew by 3% to $1.4 trillion in the first quarter.

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