Annuity sales hit record last year, eclipsing sales during 2008 financial crisis amid fear, higher rates

Amid stock market gyrations, recession fears and loftier payouts, consumers pumped a record sum of money last year into annuities, a type of insurance that offers a guaranteed income stream.

Buyers funneled $310.6 billion into annuities in 2022, according to estimates published by Limra, an insurance industry trade group.

That figure is a 17% increase over the prior record set in 2008, when consumers purchased $265 billion of annuities. That year, the U.S. was in the throes of the Great Recession and the stock market ultimately bottomed out with a 57% loss.

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Similarly, 2022 saw the S&P 500 Index post its worst loss since 2008, ending the year down 19.4%. The U.S. Federal Reserve raised interest rates aggressively to tamp out stubbornly high inflation, fueling anxieties that the central bank would inadvertently tip the nation into recession.

“In ugly times, people get concerned about safety,” said Lee Baker, a certified financial planner and founder of Apex Financial Services, based in Atlanta, and a member of CNBC’s Advisor Council.

There are many types of annuities. They generally fall into two categories: an investment or a quasi-pension plan offering a guaranteed level of income for life in retirement.

All annuities are issued by insurance companies, which hedge risks like market volatility or the danger of outliving savings in old age.

Annuities have also benefited from the Fed’s cycle of raising interest rates, which has translated to a better return on investment. Meanwhile, U.S. bonds — which typically act as a ballast when stocks fall — suffered their worst year on record in 2022, leaving few options for savers looking for relative safety and a decent return.

“This was a…