fixed annuity

(redirected from Fixed Income Annuity)
Also found in: Dictionary.

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 ?
Here, a deferred fixed income annuity is used to protect against the risk of not knowing how long the client will live (i.
SAN FRANCISCO -- As the first wave of Baby Boomers enters retirement this year, and the need for retirement income solutions becomes increasingly important, Charles Schwab today announced an expansion of its Single Premium Immediate Annuity (SPIA) offer, a fixed income annuity platform that provides choice and flexibility for people seeking ongoing sources of guaranteed income in retirement.
These additions to our existing SPIA platform further diversify our fixed income annuity offering and are consistent with Schwab's overall open architecture approach that enables investors to choose the products that make the most sense for their specific situation.
Account A, which had no fixed income annuity component and was made up of U.
3% of the account (all from the bond portion of the investment portfolio) was used to purchase a life-only fixed income annuity, had a liquid value of $667,688, almost 7 times the original deposit, at the end of the 27-year period.
Select Retirement, an individual, supplemental, immediate fixed income annuity, is issued by Nationwide Life Insurance Company, Columbus, Ohio, a member of Nationwide Financial.
Variable annuities with floor payments have been around for some time, prompting the relatively new fixed income annuity with a floor and an equity index account kicker as a way to offset the effects of inflation.
The Nationwide Portfolio Innovator, an individual, supplemental, immediate fixed income annuity contract, is an income guarantee product issued by Nationwide Life Insurance Company.
While company matches in DC plans typically focus on company stock or investments pre-determined by plan participants, SponsorMatch provides access to a unique investment vehicle that combines a target date fund with institutional investment strategies managed by BGI and the addition of a deferred fixed income annuity element - provided by MetLife - designed to turn a component of the employer match of a 401(k) plan into a future stream of guaranteed income1.
ELM's product development process, involving product review of 13 major insurance companies, found that the insulated separate account feature is rarely seen in individual fixed income annuity contracts, although common in group contracts.
Higher targets for income or bequests generally also suggest larger allocations to variable annuities with GMWB features or to traditional SWP's -- both of which offer possible equity appreciation that fixed income annuity products do not.
These were developed in conjunction with two major insurance companies, Principal Life Insurance Company, a member of the Principal Financial Group[R] for the fixed income annuity, and Nationwide Life Insurance Company, a member of Nationwide Financial[R], for the indexed annuity.