Variable-Annuity Sales Down 17.8% in ’01

Sales of variable annuities fell 17.8% to $112.8 billion last year as a rocky stock market dampened investor enthusiasm for the insurance products, according to figures released by the National Assn. for Variable Annuities, a trade group.

The popularity of variable annuities soared during the 1990s bull market, with sales peaking at $137.2 billion in 2000.

Increased sales also drew increased regulatory scrutiny, including a Securities and Exchange Commission warning that variable annuities are not appropriate for many investors and that the investment’s costs might outweigh its benefits.

A variable annuity is a combination of an insurance contract and an investment in which gains can grow tax-deferred.