Sales of equity-indexed annuities (EIAs) reached $5.37 billion in 2000, up from $5.15 billion in 1999, according to The Advantage Group, a St. Louis-based research firm that tracks EIAs.

EIAs offer a guaranteed interest rate and potential for higher interest earnings based on the performance of the stock or bond indexes, such as Standard & Poor's 500, the Dow Jones Industrial Average, Nasdaq, or the Russell 2000, among others. Although some insurers have introduced annuities using multiple indexes, 96 percent of all EIAs use the S&P 500.

Fourth-quarter 2000 sales were at $1.3 billion, which was down 13.9 percent from the fourth quarter of 1999, although up 3.8 percent from sales in the third quarter of 2000. The Advantage Group's data was compiled from a survey conducted in February 2001. Over 90 percent of the insurers that offer EIAs participated, representing 97 percent of total sales.

Jack Marrion, president of the Advantage Group, says that EIAs, on average, earn about 11 percent annually.