Fixed Annuity is defined as?

Fixed Annuity is defined as?

• A. an annuity that pays a guaranteed fixed amount during the annuity phase
• B. a variable payout depending on market performance
• C. a life insurance policy with a fixed premium
• D. an investment in the general account

Answer: (A)

A fixed annuity is defined by guaranteed, level payments during the payout phase. This means the contract promises a steady, unchanging income stream regardless of how markets perform, with the insurance company backing the payments. The stability comes from the insurer’s general account backing, not from market investments. This differs from a variable payout, which changes with market performance and investment results. It also isn’t a life insurance policy, which serves a different purpose and structure, nor simply an investment in the general account, which describes backing rather than the defining feature of fixed, predictable payments.

A fixed annuity is defined by guaranteed, level payments during the payout phase. This means the contract promises a steady, unchanging income stream regardless of how markets perform, with the insurance company backing the payments. The stability comes from the insurer’s general account backing, not from market investments.

This differs from a variable payout, which changes with market performance and investment results. It also isn’t a life insurance policy, which serves a different purpose and structure, nor simply an investment in the general account, which describes backing rather than the defining feature of fixed, predictable payments.