Since the introduction of variable or indexed annuities, which insurance companies introduced to compete with the growing popularity of mutual funds, annuity sales have risen steadily every year.  However, annuity sales have skyrocketed over the past year as a tidal wave of baby boomers are about to hit retirement age.

With life expectancies on the rise, there is a growing fear for many Americans that they will outlive the assets which they have accumulated over a lifetime.  There is also a lack of confidence in the Social Security system and it’s ability to remain solvent for more than another couple of decades, which is why they have grown popular even with the younger generations.  The decline in the stock market since the end of last summer has also played a major role in it’s rapid growth.

It is important to choose carefully which insurance company to purchase an annuity from.  As the current economic downturn has proven, even the insurance industry isn’t immune to losses.  Due to the open ended liabilities these type of financial products incur for insurance companies, financial strength should be a primary concern.

Different retirement strategies may offer the possibility of higher rates of return as well as similar tax benefits but none of them offer the type of guarantees which you can only find with annuities.  No other type of investment offers the ability to receive guaranteed income streams for the rest of your life.

Earlier today, the U.S. House passed the Genetic Information Nondiscrimination Act of 2008(GINA) by a vote of 414-1.  The bill which was also approved by the Senate with a 95-0 vote last week is expected to be signed into law by President Bush when it crosses his desk.

GINA would prohibit employers and health insurers from discriminating against individuals based on information gained from genetic testing.  They would also be prohibited from seeking or disclosing any type of genetic information.

The proposed law could have a large impact on the health insurance industry in the future.  Health insurers would be unable to set premiums or deny claims to individuals that may have higher risks to certain diseases based on their genetic makeup.

While genetics is already a controversial subject, many doctors have claimed that research has been slowed due to the fear many patients have that this information could be used against them.  The passage of the bill along with the completion of human genome project could make genetic testing much more widespread, which could lead to medical breakthroughs in the future.

In a sign that the credit crisis maybe nearing an end, the financial services sector including the insurance industry is beginning to heat up with merger and buyout activity.  The insurance industry has faired better than their counterparts in the commercial banking and securities brokerage sectors, amidst the fallout of the sub prime collapse.

Insurance companies have taken their fair share of lumps and losses will eventually eclipse what was paid out for Hurricane Katrina.  For the most part it was in isolated pockets like bond insurance that chose to deal directly with mortgage backed securities.  However, the underlying nature of much of the industry has let it avoid most of the shortsightedness of the rest of the finance world.

Due to the type of financial products insurance companies sell, they must be much more risk adverse, which has served them well in a faltering economy.  The must also maintain much stronger capital positions in order to meet claims obligations, thus they have large cash reserves on hand and haven’t been affected as much by the credit crunch.

A growing concern for the future is the drop in investment income that makes up the bulk of the profits for the industry.  Though with stocks prices depressed, companies that have weathered this storm the best are out looking for deals.

As is with life, the strong will survive while the weak will get gobbled up by their larger brethren.