Definition of Fixed Annuity

Fixed Annuity is an insurance contract where the insurance company guarantees fixed payments to the annuitant usually until the annuitant’s death.

Applying "Fixed Annuity" to Securities Exams:

A fixed annuity will offer the annuitant a guaranteed rate of return but that rate of return may not sufficient to keep pace with inflation. A fixed annuity will not subject the annuitant to principal risk but the annuitant will be subject to purchasing power risk.

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