The Term “Fixed” In A Fixed Annuity Refers To

Shawn Plummer

CEO, The Annuity Expert

A fixed annuity is a type of financial contract that offers guaranteed rates of return, often with the promise of lifetime payments. However, investing in a fixed annuity can be challenging to take your money out before the agreed-upon period is up. This post will show you what “fixed” means in terms of fixed annuities and how these products differ from other investment vehicles.

The Term “Fixed” Refers To

The term “fixed” in a fixed annuity refers to the insurer guaranteeing the contract owner that: 

  • Your principal will not be lost regardless of the insurer’s investment performance.
  • The interest equal to a minimum rate specified in the contract will be credited and guaranteed. 
The Term Fixed In A Fixed Annuity Refers To

Interest Rate Guarantees

There may be two levels of guaranteed interest in a fixed annuity:

  • A current rate that is guaranteed at the beginning of each calendar year
    • Fixed Annuity: The interest rate is predetermined for all years at the sale of the contract.
    • Fixed Index Annuity: The interest rate is guaranteed at the beginning of each calendar year and can change yearly.
  • A minimum guaranteed rate will be paid if the current rate falls below this.

Related Reading: What Are The Best Fixed Annuity Rates Today?

Term Fixed Refers To

Interest Credited To a Fixed Annuity Is No Lower Than The

The interest payable for any given year is declared in advance by the insurance company and is guaranteed to be no less than the minimum specified in the contract. A fixed annuity has two interest rates: a minimum guaranteed rate and a current rate.

Interest Rate Guarantees

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Frequently Asked Questions

The interest credited to a fixed annuity is no lower than what?

The guaranteed minimum interest rate specified in the annuity contract, regardless of market fluctuations.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed insurance agent and annuity broker with over a decade of first-hand experience. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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