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Benefits of Fixed Annuities

Benefits of Fixed Annuities

Guaranteed minimum interest rates.

Arguably, this the main selling point of a fixed annuity. But, what exactly does this mean. Well, a fixed annuity will never, and I mean never, earn less than the guaranteed interest rate.

I know. This sounds too good to be true. But, it is. Even better? It doesn’t even matter how the insurance company’s investments are performing.

I would be remiss, however, not to mention that the insurance can adjust the rate initially based on a stated formula or on the yield it is earning. But, again, your contract will include a minimum rate guarantee.

Premium protection

Thanks to your contract, you can not lose your initial investment or your premium with a fixed annuity. If you’ve been sweating your retirement, this should help put your mind at ease.

Income for life

Most people want guaranteed retirement income. One study even found that “71% of participants in an employer-sponsored plan would like an option that offers guaranteed income for life in their plan, while 58% said they would like an annuity as part of their plan.”

Purchasing a life annuity will have you belting Hall & Oates “You Make My Dreams Come True.” Why? Because it ensures that you’ll never outlive your income payments.


Unlike its cousins, variable and indexed annuities, fixed annuities are straightforward. Because there aren’t complicated formulas needed to figure out how much money you will in income payments, they’re easy to understand and purchase.


Because you agreed to the terms of the contract, you know exactly what to expect. That’s certainly a sigh of relief if you get anxiety or panic attacks easily over your investment portfolio or the vitality of the stock market.

Lowest risk

The interest you earn is not dependent on the performance of the investments or stocks you possess. As a retiree, this is clutch since they can’t afford to risk losing too much money. After all, they still need to pay their living expenses and address the rising cost of healthcare.

Chapters - Fixed Annuity

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