What is a fixed annuity?

What are the benefits?

Tax deferral

Its tax-deferred status allows you to benefit from compounded growth.

Principal and interest protection

It offers minimal investment-risk exposure while offering the opportunity to grow money at a set interest rate. The rates are generally higher than with traditional savings vehicles.

No market risk

It offers guaranteed interest rates without exposure to market fluctuations.

Flexibility

If you choose to annuitize your contract for lifetime income, you can choose from different payout options: set payments for a specified period or a lifetime stream of income.

Lower investment minimums

It usually requires only $1,000 to $10,000 for an initial investment.

Beneficiary protection

You can pass assets to beneficiaries and avoid costly probate. Optional riders, available for an additional cost, can enhance the amount your beneficiaries may receive.

What should you consider before purchasing?

Less opportunity for growth

Without market participation, growth opportunity is minimal compared with variable annuities, but there’s also less risk.

Inconsistent rates

Some rates can be offered for a fixed period and then drop after that set period of time.

Interest may not keep up with inflation

If this happens, you could lose buying power.