Variable annuities with guaranteed living benefit riders surged up 78% in the past two years to more than $521 billion in the fourth quarter of this year, according to a new LIMRA report charting the sales prowess of more than 95% of the variable annuity sector.

Because more and more investors are finding they need to bolster their retirement income as they age, variable annuities have become a viable alternative to traditional variable annuities that primarily only offered guaranteed minimum death benefit payouts to surviving beneficiaries.

Today's variable annuities sold through insurance companies, wirehouses, banks and independent investment advisors now include a variety of living benefits including guaranteed minimum income benefits, guaranteed minimum withdrawal benefits and guaranteed minimum accumulation benefits.

"GLBs are increasingly integral to the variable annuity industry," Dan Beatrice, a senior analyst at LIMRA Retirement Research, said in the report. "The lion’s share of new VA sales has been for contracts with GLB riders. In addition, persistency for these contracts is better than those without the GLB riders, resulting in more than double the 36 percent growth rate of total VA assets."

In the fourth quarter, variable annuities with GLB elected increased to $23.1 billion, accounting for 79% of all new variable annuity sales. For the year, sales of these increasingly popular investment products jumped 8% to more than $81 billion.

LIMRA's report found that the election rate of guaranteed living benefits riders checked in at 88% and that 65% of buyers opted for variable annuities with a guaranteed lifetime withdrawal benefit.
Guaranteed minimum income benefit riders slid 2% from the third quarter to a total of 16% in the fourth quarter.  Guaranteed minimum accumulation benefit election rate remained flat at 4% and guaranteed minimum withdrawal benefit elections checked in at 2%.