The Insured Retirement Institute said third-quarter annuity sales rose to $57 billion in the third quarter, up 5% from the year-ago period. Sales year-to-date were $175.4 billion, up from $163.1 billion in 2010.

Demand for guaranteed lifetime retirement income in the face of extreme market volatility has driven the uptick in annuity sales, said IRI President and CEO Cathy Weatherford. Annuities are valuable tools for financial advisors as they “help address the adversity clients are feeling toward volatility,” she said.

Sales of variable annuities posted the greatest gain from year-ago levels, jumping to $39.1 billion, a 14% increase from $34.3 billion in the third quarter of 2010. Year-to-date variable annuity sales were $118.1 billion, 17% above the $100.7 billion recorded through the same period in 2010.

Third-quarter sales of fixed annuities, however, dropped to $17.9 billion from $20.5 billion in the third quarter of last year. Year-to-date fixed annuity sales were $57.2 billion, down 2.7% from $58.8 billion in 2010. 

Fixed annuities are “going to have ebbs in growth,” particularly during periods of record-low interest rates as the markets are experiencing today,” Weatherford said. 

While sales of annuities were up overall from a year ago, they were off 6% from the previous quarter. Third-quarter sales of variable annuities fell 2% from $39.9 billion in the second quarter.  Fixed annuities declined 12.3% from $20.4 billion in the second quarter.