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fixed annuityIn the broadest sense, there are 2 main types of annuities from which to choose from, those being fixed and variable annuities. Fixed annuities are the more conservative option in that they offer a guaranteed growth. Variable annuities offer more side investment options that cannot be guaranteed to increase in value. Therefore they are considered a more "hands-on" annuity option for a risk-oriented investor. (It should be noted that although variable annuities do not guarantee growth, they do have potential for a growth that far exceeds that of fixed annuities)A fixed annuity's guaranteed growth is born out of an interest rate that remains constant throughout the designated time frame. Once said timeframe ends, another one is established with a new interest rate that better reflects the current state of the market. Although the interest rate might vary slightly throughout fixed annuity timeframe, it still guarantees more of a return than a variable. Fixed plans offer fewer features and side investment vehicles than a variable annuity, however their fees are also much lower. Another benefit of a fixed annuity is the fact that its death benefit is immediately passed on to your designated beneficiaries following the unfortunate occurrence of the policyholder's death. Standard protocol with death benefits is that they go through probate in which it is verified that the beneficiaries were in fact designated by the policyholder. (This can be an uncomfortable process following the death of a loved one) Simply stated, fixed annuities bring stability and safety to your investment portfolio. To continue learning more, take a look at GUARANTEED ANNUITY |
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