What’s Fixed In A Fixed Indexed Annuity?
A common question that comes up about fixed indexed annuities is what exactly is the fixed portion of the contract? In different types of fixed annuities, the fixed portion indicates that the account has a fixed interest rate, or a rate that doesn’t fluctuate with changes in the market conditions.
This is not the case with a fixed indexed annuity. The fixed indexed annuity is an annuity contract in which the fixed portion refers to the length of the contract. The fixed annuity is designed to pay benefits to the beneficiary for a fixed period of time. This can be anywhere from 5 years to 25 years or more. The period is fixed upon the creation of the contract and often cannot be changed without first canceling the contract.