Which term describes a contract that combines features of fixed and variable annuities?

Which term describes a contract that combines features of fixed and variable annuities?

• A. Combined Annuity
• B. Hybrid Annuity
• C. Indexed Annuity
• D. Flexible Annuity

Answer: (A)

A contract that blends guaranteed fixed features with investment-based growth is described as a combined annuity. The fixed component provides a guaranteed minimum payout or interest, while the variable component allocates funds to subaccounts that can grow (or decline) with market performance. This combination gives a level of safety and predictability alongside potential upside, which is what distinguishes it from a purely fixed annuity (guaranteed no investment risk) or a purely variable annuity (payout largely tied to subaccount performance). While indexed or flexible premium designs describe other product aspects, the term that denotes mixing fixed guarantees with variable growth ideas is the combined annuity.

A contract that blends guaranteed fixed features with investment-based growth is described as a combined annuity. The fixed component provides a guaranteed minimum payout or interest, while the variable component allocates funds to subaccounts that can grow (or decline) with market performance. This combination gives a level of safety and predictability alongside potential upside, which is what distinguishes it from a purely fixed annuity (guaranteed no investment risk) or a purely variable annuity (payout largely tied to subaccount performance). While indexed or flexible premium designs describe other product aspects, the term that denotes mixing fixed guarantees with variable growth ideas is the combined annuity.