A fixed annuity provides a guaranteed rate of interest during the accumulation period and a guaranteed (“fixed”) amount of income when the contract is annuitized. With a fixed annuity, the insurance company is responsible for investing the premium payments and therefore assumes investment risk. The insurance company is obligated to provide guaranteed annuity payments regardless of whether their investments have generated an adequate rate of return. With a fixed annuity: 1) the money can go in as a single premium payment or a series of payments; 2) the money is invested at a fixed or guaranteed rate, and; 3) payments are at a fixed rate and can begin immediately or at some future date.
Submitted by tom on
It is reported that Federal Reserve Chairman Ben Bernanke owns two annuities.
One is a variable annuity and the other is a fixed annuity. Each annuity is worth between $250,000 and $500,000.
Interest rates are the raw material used in manufacturing annuities. Rates are currently very low--the 10 year treasury note is hovering around 3.4 percent and 30 year...
