fixed annuity


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Related to fixed annuity: variable annuity, immediate annuity

Fixed Annuity

An annuity that allows 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 payments. Typically, the insurance company issuing a fixed annuity 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 annuity.

fixed annuity

A stream of unchanging payments for a specific period or for an individual's lifetime, depending on the terms of the annuity contract. Fixed annuities are sold by insurance companies to people who desire a fixed income. Also called guaranteed-dollar annuity. Compare variable annuity. See also hybrid annuity.

Fixed annuity.

A fixed annuity is a contract that allows you to accumulate earnings at a fixed rate during a build-up period.

You pay the required premium, either in a lump sum or in installments. The insurance company invests its assets, including your premium, so it will be able to pay the rate of return that it has promised to pay.

At a time you select, usually after you turn 59 1/2, you can choose to convert your account value to retirement income.

Among the alternatives is receiving a fixed amount of income in regular payments for your lifetime or the lifetimes of yourself and a joint annuitant. That's called annuitization. Or, you may select some other payout method.

The contract issuer assumes the risk that you could outlive your life expectancy and therefore collect income over a longer period than it anticipated. You take the risk that the insurance company will be able to meet its obligations to pay.

References in periodicals archive ?
Along with these positive viewpoints by fixed annuity owners, the sales of fixed annuities continue to climb.
In a GRAT transaction, the grantor transfers property to a trust, retaining the right to receive a fixed annuity payment for a specified number of years.
A fixed annuity means a single account statement, which means less stress and more time for the pursuit of hobbies and the enjoyment of life.
New York Life Insurance and Annuity Corporation, New York, has announced the launch of the New York Life Secure Term Fixed Annuity.
State regulators and staff are continuing to look at ways to protect consumers yet they are often uninformed or misinformed about fixed annuity marketing practices and existing regulations that protect consumers.
77-454, the letter ruling held that when the fixed annuity to be paid from a trust will exhaust the corpus of the trust before the end of the trust term, the value of the retained annuity is the present value of the right to receive the payments until the fund is exhausted or until the prior death of the annuitant, rather than the value computed from the actuarial tables based on the stated term of the trust.
Pacific Life Producer Alliance opens up a new opportunity for select registered representatives and experienced life insurance producers who, in the past, did not have access to Pacific Life's fixed annuity products and services," says Chris van Mierlo, senior vice president, Pacific Life Retirement Solutions Division.
Fixed annuity sales increased 79 percent in the fourth quarter of 2008, marking a record-setting $109.
However, fixed annuity sales jumped 79% in the fourth quarter of the year and 50% for all of 2008, from $72.
For example, a client who wishes to have his or her portfolio (exclusive of the annuity contract) grow over a 10-year period can purchase an immediate 10-year fixed annuity.