Fixed Annuities

Fixed Annuities are issued by insurance companies which protect against loss and pay interest based on a fixed rate of return. The interest rate is typically based on current interest rates and is set for a number of years. After the initial interest rate period expires, a renewal rate may be offered or the client may exercise a “bailout provision”, if offered.  The growth is tax deferred until such time the owner starts withdrawals. Typically, there is an annual “free withdrawal” provision, which allows the owner to access a percentage of their money, free of surrender charges. After the surrender charge schedule has expired, the owner may have access to all of their money without surrender charges being imposed.