How Did 1950s Annuities Breakthrough Modern Retirement?

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Annuities evolved significantly during the 1950s. Two big changes happened during this decade: the introduction of variable annuities and the rise of group annuities. 

This laid the foundation for the diverse range of annuity products we see today. By understanding these historical developments, we gain insights into modern annuity features. For example, guaranteed lifetime withdrawal benefit (GLWB) and fixed indexed annuities (FIA). 


Insurance companies introduced the first variable annuity in 1952. It allowed policyholders to invest in separate accounts with the potential for higher returns.  

This innovation paved the way for modern variable annuities. They now offer more choices of investment options. This allowed consumers to pick the options that fit their needs and comfort with risk. They got to choose between growing their money faster or having a guaranteed income, or a mix of both. This includes living benefit riders such as GLWBs and optional death benefit guarantees. 

However, like today, variable annuities carry more risks, which eventually led to the introduction of FIAs in the mid-1990s. FIAs combine the downside protection of fixed annuities with the growth potential of market index performance.    

Flocking Together 

Variable annuities weren’t the only big change in the 1950s. Group annuities also transformed the market.  

Employers popularized group annuities as an employee benefit. More employers began offering these products within pension and insurance plans. As a result, more people, not just the wealthy, could now buy annuities. 

This shift to group contracts established the foundation for the modern annuity market. In this market, employers included annuities in 401(k) plans as investment options. 

The group annuity structure also influenced the development of TSAs and 403(b) plans. Educators and non-profit employees use these for retirement savings. 

Break On Through 

Like the 1950s trends, modern technology is revolutionizing how advisors sell annuities. Sales automation solutions empower advisors to navigate the complex world of annuities efficiently. 

They can streamline the entire annuity sales journey with a digital end-to-end process. The best solutions offer a faster, easier, error-free application process. This improves advisor productivity, leading to greater sales volume and increased revenue. 

Digital solutions have arrived at the perfect time. This helps meet the increasing demand for guaranteed retirement income. Now, financial professionals can spend less time on administrative tasks. They spend more time focusing on building client relationships and growing their practice. This increased efficiency is crucial. 

Terms of Endurance 

The 1950s might seem like a long time ago. But, the new ideas about annuities from then are still important today. These ideas continue to shape the products, plans, and tools that will enable stable financial security for many. 

As an industry, we can keep the annuity market growing and changing in good ways with modern sales platforms. The technology will help meet client needs as the world continues to evolve. 

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