What are Fixed Annuities?


First you need to understand exactly what the term fixed annuity means. In basic terms they can be considered to be a contract between you and an insurance company. You essentially entrust them with your money to look after and they agree to give you a financial return on your initial investment in exchange. The meaning of this is that you have a return that is guaranteed on your investment and do not need to stress about losing money, even if the company loses the money that was turned over by you as an investment, you never lose.

Types of Fixed Annuity Products

There are various different kinds of fixed annuities and it’s important to understand them all before you decide where to invest your capital. The amount of money you receive in your return will depend on the particular kind of fixed income type annuity you choose to make an investment in. One type gives a set number of payments and another type gives payments throughout your whole lifetime.

Immediate Fixed Annuity

One type of annuity is the immediate fixed annuity. With this type you make your investment as a lump sum and then receive regular payments. After deciding to make an investment in this kind of annuity, you do not have access to your money that you originally invested any more. Instead of this, you can choose your own payment terms example, what kind of payments you want to receive. After deciding to invest your money and selecting your payment terms, the regular payments will stay the same. This means that your payments will not increase with inflation so you need to pay careful attention to the rates of the fixed annuity at the time you choose to make your investment.

Deferred Fixed Annuity

One more type of annuity to possibly invest in is the deferred fixed annuity. This kind of annuity is an initial investment that is made with a promised return on the investment at a later date. There are different timescales for the length of investment, and frequently you are charged a penalty if you choose to withdraw the money early.

Most insurance companies however, allow you to access up to 10% of your investment every year without having to pay any penalties.

More people are deciding to invest in some type of fixed annuity as it is safer than other forms of investment.



                                                   Call Today - 1-334-309-4181