A Fixed Annuity is a general term for an Annuity with a fixed interest rate, as opposed to a variable rate dependent on the stock market.
The most typically referred to annuity when someone says "fixed annuity", is a Fixed Deferred Annuity.
This gives a compounding interest rate for a specific period of time.
Most Fixed Deferred Annuities are able to be annuitized after the first or second year. Annuitizing a Fixed Deferred Annuity means to set up a yearly stream of income based on your life expectancy.
Another type of Fixed Annuity is a Fixed Immediate Annuity. Instead of the ability to defer Annuitization, the contract immediately starts to pay a lifetime income stream.
There are also Fixed Period Certain Annuities which pay an income stream for a specific number of years. And Fixed indexed Annuities, which guarantee a minimum interest rate, while crediting a limited interest rate based on the gains of a market index.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
A fixed annuity is an insurance contract. The insurance company makes fixed dollar payments, normally monthly, to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. This type of contract can be funded with periodic payments prior to annuitization or a single deposit.
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The most typically referred to annuity when someone says "fixed annuity", is a Fixed Deferred Annuity.
This gives a compounding interest rate for a specific period of time.
Most Fixed Deferred Annuities are able to be annuitized after the first or second year. Annuitizing a Fixed Deferred Annuity means to set up a yearly stream of income based on your life expectancy.
Another type of Fixed Annuity is a Fixed Immediate Annuity. Instead of the ability to defer Annuitization, the contract immediately starts to pay a lifetime income stream.
There are also Fixed Period Certain Annuities which pay an income stream for a specific number of years. And Fixed indexed Annuities, which guarantee a minimum interest rate, while crediting a limited interest rate based on the gains of a market index.