What is a key feature of fixed annuities?

Fixed annuities are designed to minimize market risk for the investor. Unlike variable annuities, which are subject to fluctuations based on market performance, fixed annuities guarantee a specified interest rate and fixed payments, thereby protecting the annuitant from market volatility.

Equity indexing is a feature associated with indexed annuities, not fixed annuities. Indexed annuities link returns to a stock market index, which may provide higher potential returns but also introduces market risk. In contrast, fixed annuities do not offer this feature, focusing instead on stable, guaranteed returns.

Variable interest characterizes variable annuities, where returns fluctuate based on the performance of underlying investments. Fixed annuities, however, provide a constant interest rate, ensuring that the investor knows exactly what to expect in terms of returns, thereby eliminating the uncertainty associated with variable interest.