LIMRA's second-quarter survey puts total U.S. annuity sales at a record $123.9 billion, registered index-linked annuities at a record $23.3 billion, and single premium immediate annuities at a record $4.0 billion, up 12% year over year (LIMRA, July 2026). The RILA record is a crediting-rate story. The SPIA record is a mortality and interest-rate story, and it resets payout assumptions for the far larger accumulation book still waiting to convert.
Key Takeaways
- $4.0 billion of SPIA sales, up 12%, alongside $1.3 billion of deferred income annuities, up 32% sequentially. Both records commit brand-new longevity assumptions at issue.
- $123.9 billion in total sales, the 11th consecutive quarter above $100 billion, with fixed-rate deferred still the largest category at $44.7 billion.
- 4.63% on the 10-year Treasury against the sub-2% environment that shaped payout assumptions through the 2010s. Every basis point raises the quoted payout rate for the same premium.
- 3.1 million contract-years across 26 companies in the 2020-2024 payout mortality study, which found 2023-2024 annuitants running below the 2012 IAM Table's projection.
- VM-22 replaced CARVM on January 1, 2026, so payout-conversion reserves now move with market conditions and company best-estimate assumptions rather than a factor lookup.
The Product Mix Behind the Record Quarter
Every major category grew or set a record, which is itself unusual. LIMRA attributes the breadth to "a combination of global tensions, market volatility and rising interest rates" lifting demand across products simultaneously rather than rotating share between them (InsuranceNewsNet, July 2026). Fixed-rate deferred remained the largest single category at $44.7 billion, down 2%, while fixed indexed fell 7% to $30.7 billion and traditional variable annuities climbed 25% to $17.9 billion.
| Product | Q2 2026 sales | YoY change | QoQ change |
|---|---|---|---|
| Total annuity sales | $123.9B | +4% | — |
| Registered index-linked annuity | $23.3B | +22% | +11% |
| Fixed-rate deferred annuity | $44.7B | -2% | +26% |
| Fixed indexed annuity | $30.7B | -7% | +14% |
| Traditional variable annuity | $17.9B | +25% | +4% |
| Single premium immediate annuity | $4.0B | +12% | +9% |
| Deferred income annuity | $1.3B | +5% | +32% |
Year to date, sales reached $231.3 billion, 2% above the first half of 2025 and a first-half record on top of the $464.1 billion full-year record for 2025. The two payout categories are smaller in dollar terms and structurally distinct from everything else on the list, and both set records: SPIA at $4.0 billion and DIA at $1.3 billion, the latter up 32% from the first quarter.
That distinction is the whole point. RILA, fixed indexed and fixed-rate deferred products share one actuarial structure: the insurer sets a crediting mechanism at issue and the liability tracks an index or a declared rate over a defined deferral period. Mortality barely enters the pricing. The carrier's exposure runs through hedge cost and crediting-rate risk, which is why a 22% RILA surge is an extension of an options-pricing problem the industry has run at scale for years.
Payout Mechanics: Yield Against Longevity
A SPIA quote is mechanically the reciprocal of the net single premium per dollar of annual income, an annuity-due value that sums the discount factor times the survival probability across every future year. Every basis point of yield the insurer locks in on the backing portfolio shrinks that sum and raises the quoted payout rate for the same premium. That is the channel through which a 4.63% 10-year Treasury, against a 2% yield, makes today's quotes look far better than they did five years ago, and why LIMRA ties rising rates directly to demand.
Mortality moves the other way and dampens it. The SOA Research Institute and LIMRA's 2020-2024 Individual Payout Annuity Mortality Experience Study, spanning 3.1 million contract-years across 26 companies, found a survivor-selection effect in the 2023-2024 tail: annuitants who lived through the pandemic years now run below the 2012 IAM Table's mortality projection. Longer expected survival raises every survival probability in the same summation the yield curve is shrinking.
The two net against each other in a way a buyer never sees in one quote. Move the discount rate from a 2% environment to roughly 4.6% and, holding mortality fixed, a $500,000 premium supports materially higher monthly income on a life-only SPIA for a 70-year-old. Layer in a 2-to-3 percentage point downward revision to the mortality assumption, the range the survivor-selection finding suggests for post-2022 issues, and a meaningful share of that improvement is given back through a longer expected payment stream.
The pricing decision sits in that gap. A carrier quoting off the 2012 table with no post-COVID adjustment is overpaying buyers relative to its true expected liability; one that has adjusted quotes a rate the buyer reads as less generous than the headline Treasury yield implies. The second is a competitiveness problem rather than a solvency one, and the job this cycle is making sure the difference between the naive calculation and the actual quote is the mortality basis working as intended rather than a stale table absorbing margin erosion.
Demand is not cyclical noise. More than 11,000 Americans turn 65 each day, over 4 million a year, and fewer carry pension income. LIMRA finds 72% of current retirees report enough lifetime-guaranteed income to cover basic living expenses against only 47% of working adults aged 50 to 75 who expect to, an 11-percentage-point confidence decline since 2017.
The Deferred Book Waiting to Convert
The $44.7 billion of fixed-rate deferred and $30.7 billion of fixed indexed booked this quarter are accumulation liabilities today, but a portion will annuitize into payout streams through an income rider or a full election at the end of deferral. That conversion path is where the reserving framework changed on January 1, 2026. VM-22 replaced the prescribed Commissioners Annuity Reserve Valuation Method with a principle-based, company-specific stochastic framework for non-variable annuities, running in parallel before mandatory application to all new business by January 1, 2029.
Under CARVM a payout-conversion reserve was largely a factor lookup, insensitive to whether the market at conversion looked like a 2% or a 4.6% yield world. Under VM-22, reserve levels move with market conditions and with the company's own best-estimate mortality and lapse assumptions. That is a more accurate reflection of economic risk and a source of earnings and capital volatility that did not exist under the old formula (Milliman, 2026).
The scope of the exposure is not this quarter's $4.0 billion of new SPIA business. It is however much of the $464.1 billion 2025 vintage eventually annuitizes, converting during a period when rates move at all.
Timing compounds the burden rather than easing it. Most fixed-rate deferred and fixed indexed contracts sold this quarter carry surrender charge periods of five to ten years, so the bulk of the $75.4 billion in combined sales reaches its first annuitization decision somewhere between 2031 and 2036. Nobody can assume today's 4.6% yield or today's post-COVID mortality basis still describes that market.
VM-22's stochastic reserving carries that scenario range forward rather than freezing it at issue, which pushes the real work onto assumption setting now. The projected annuitization rate, the share of deferred policyholders expected to elect income rather than lump-sum withdrawal or death benefit, has to be revisited every valuation cycle against a demand signal this quarter's records suggest is strengthening. Many legacy models still carry a flat, low single-digit annuitization rate by default, and that assumption is now doing work no factor lookup used to ask of it.
Further Reading
- Multiemployer Pensions Hit a Record 106% Funded at Midyear 2026
- SOA-LIMRA Payout Annuity Study Resets SPIA Mortality Pricing
- VM-22 Goes Live: Annuity Reserves Enter the Stochastic Era
- LIMRA Q1 2026: The RILA-FIA Product Shift and What It Means for Hedging and Pricing
- RILA Sales Hit $21.2 Billion as Total Annuity Sales Clear $100 Billion for a Tenth Quarter
- AM Best's Q1 2026 Data Shows an 18% Life/Annuity Income Decline That Traces to One Carrier
- RGA's Record Quarter Rides a 106-bp New-Money Spread
Sources
- LIMRA, “U.S. Annuity Sales Notch Tenth Consecutive $100 Billion+ Quarter,” LIMRA.com, July 2026
- InsuranceNewsNet, “LIMRA: Annuity sales set new quarterly record with $123.9B in Q2,” InsuranceNewsNet.com, July 2026
- LIMRA, “Final U.S. Retail Annuity Sales Set New Sales High, Totaling $464.1 Billion in 2025,” LIMRA.com, 2026
- LIMRA, “Future Retirees Face a Different Reality and Increasingly Look to Annuities for Financial Security,” LIMRA.com, 2024
- LIMRA, “The 2026 Annuity Sales Outlook Remains Strong,” LIMRA.com, 2026
- NAIC, Valuation Manual, January 1, 2026 Edition, VM-22 Non-Variable Annuity Reserve Requirements, content.naic.org, 2026
- Milliman, “VM-22 Readiness: Key Areas for Consideration,” Milliman.com, 2026
- SOA Research Institute, “2020-2024 Individual Payout Annuity Mortality Experience Study,” SOA.org, 2026
- Federal Reserve Bank of St. Louis, Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, FRED.stlouisfed.org, July 2026