Fixed annuity

What is a fixed annuity?

A fixed annuity is a contract between you and your life insurance company. A fixed annuity is designed to provide tax-deferred growth and/or income to meet your needs. A fixed annuity can last for your lifetime or a specified period of time. A fixed annuity can offer you a current interest rate on premiums you contribute to your plan.

Fixed Annuity values are backed by the general assets of the insurance company. You should always select a fixed annuity that is issued by a highly rated insurance company. For a more secure fixed annuity, it is best to select companies that have been in business for 50 years plus.

A Fixed annuity is a low risk investment

A fixed annuity is generally a low-risk product for people who want predictable rates of return and/or earnings. With a fixed annuity, you earn a rate of return that is fixed for a particular period of your choice. Another major advantage of a fixed annuity is that most fixed annuity plans are not affected by the day-to-day fluctuations of the equity markets.

A fixed annuity has two phases: the accumulation phase of the fixed annuity and the distribution phase (or payout) of the fixed annuity :

The accumulation phase of the fixed annuity is when the money grows tax-deferred. During the accumulation phase of the fixed annuity, you are basically investing money in this fixed annuity at a fixed or variable rate (you choose.).

The distribution phase of the fixed annuity is when you decide how you want to withdraw your money or how your money should be paid out to you.

During the distribution phase of your fixed annuity, you withdraw your money as you wish :

Fixed annuity - a lump sum withdrawal.

Fixed annuity - a regular income payment schedule.

Fixed annuity - a guaranteed income plans.

Fixed annuity - a unitization.

Which Annuity to choose?

CD Annuity - The most comparable to bank CD's. Your get a predictable rate of return.

Fixed Rate Annuity - This fixed annuity will usually offer a fixed rate for a short to medium period of time at sometimes lower guaranteed rates.

Indexed Annuity - This annuity is one of the most popular today. This annuity allows you to receive higher returns than with many fixed rate annuities. This annuity is ideal for individuals who want to take advantage of equity fluctuations, get potential higher returns but without the downside risk of the equity market.

Immediate Income Annuity - This annuity provides a guaranteed stream of income for a period of time of your choice. This annuity is most popular with retirees. The income of this annuity is for life or a selected period.

Interest Bonus Annuity - This annuity offers a substantial first year bonus (at times as high as 10%.) This annuity is a great fit for many people who experienced investment losses and are trying to recoup these losses through an interest bonus annuity. This annuity tends to run for longer periods than a CD Annuity, a Fixed Rate Annuity, Indexed Annuity or an Immediate Income Annuity.