Fixed Annuity

One way investors can earn income and capitalize on various investment opportunities is through a Fixed Annuity contract that the holder enters with an insurance company. That company is then obligated to pay a set amount to the annuity holder for a specified period period of time, at a predefined rate. Upon the end of the terms, the insurance company owns the invested capital. Fixed Annuities are useful in that they provide a regular predetermined annuity payment that is defined when the annuity holder enters into a contract with the insurance company. This type of annuity has a fixed payment term and amount that does not fluctuate with market conditions. These fixed payment terms provide annuity holders with a reliable stream of income that allows them to meet their financial obligations consistently for designated period. Over time however, unlike other investments such as real estate, Fixed Annuity returns will be negatively impacted by the economy through decreased purchasing power due to inflation.