Fixed Rate Annuities Are They For You
Fixed rate means the rate is fixed and will not fluctuate up down life variables. People like fixed rates because they know how much they will have and can plan better for their future. In essence fixed annuities provide a guaranteed rate of return.
Payments are made by the annuitant (the primary purchaser) to fund the annuity (accumulation period). During this time the insurer invests these payments into conservative, long term securities. The amount of interest that is credit to is a steady and is determined at the beginning of the annuity contract. What makes annuity so attractive is the guaranteed minimum specified in the contract.
When a fixed rate annuity is converted to a payment mode it does provide a guaranteed fixed benefit amount to the annuitant. The disadvantage to fixed annuities is the decline in the purchasing power of their payments decline over the years due to inflation. Many people who are concerned about their declining purchasing powers look toward a variable annuity.
Check back to annuity buyers secrets for more fixed rate annuities information.
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