Variable annuity sales reached record levels during the first nine months of 1993, reflecting the growing popularity of tax-deferred products.

Net sales of variable annuities, which are insurance contracts that invest in underlying pools of securities, hit $21.75 billion through Sept. 30, according to estimates released last week by Lipper Variable Insurance Products Performance Analysis Services.

Sales for the period exceeded sales for all of 1992 by 45%, according to the Denver-based company, a unit of Lipper Analytical Services, Summit, N.J.

An estimated $8.5 billion in variable annuities were sold in the third quarter, surpassing net sales for both previous quarters. This is "an all-time high," according to Lipper. During the same period last year, sales were just $3.7 billion.

While variable annuity sales continued to soar, sales of variable life insurance products dropped slightly from the previous two quarters.

Sales in the third quarter were $2.8 million, compared with $3.3 million in the second and $2.2 million in the first.

Analysts say the drop might have been caused by the increased interest in annuities at the expense of variable life sales.

Taxes Deferred

Variable life insurance is a tax-deferred investment that gives policyholders the opportunity to earn capital pins and borrow against the cash value of the policy without penalty.

The kinds of products sold, in both the variable annuity and variable life categories shifted in the first nine months of this year. While assets in money market and fixed-income products grew by $5.42 billion, the overall asset share for money market products fell 3%, while fixed-income products lost 1% of their overall asset share.

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