What is a fixed annuity?

A fixed annuity is where the insurance company will guarantee a certain amount of interest over a period of time. Then when it comes time to receive the payouts, they will be guaranteed to be a fixed amount over the agreed upon period. This payout can be for a certain number of years, like for 10 years, or for an indefinite period of time, your lifetime. The beauty of this is that it is guaranteed you will get this amount whether or not the economy is doing well or not. It provides a great peace of mind.

The Guarantee

Since the payout amount is guaranteed, it is important to evaluate the quality of the insurance company you purchase a fixed annuity from.

You don't have to plow through the financials of potential insurance companies do determine which companies are financially secure and will be their when you need them.

Rating Systems

A number of companies provide rating systems for insurance companies.

You can find these online or at the library. Some of the most trusted are:

• A.M. Best
• Standard and Poor's
• Duff and Phelps
• Moody's