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Fixed Benefits |
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Fixed benefits Payments to a beneficiary that are paid in fixed preset amounts and are not variable. Fixed Benefits In annuities and insurance, benefits that guarantee the annuitant a fixed return for the life of the annuity. Like any annuity, the annuitant buys into a policy, either with a lump sum or premiums, over a period of time. When the annuitant reaches a certain age or retirement (whichever is greater), he/she begins to receive the fixed benefits. Generally speaking, the insurance company issuing an annuity with fixed benefits invests the premiums in low-risk investment vehicles, such as bonds. This results in a smaller likelihood that the insurance company will be unable to make the payments, but also exposes the annuitant to inflation risk. See also: Variable benefits. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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