Florida Life and Health Insurance License Test 2025 – 400 Free Practice Questions to Pass the Exam

A fixed annuity is primarily characterized by its ability to provide a guaranteed payout at a set interest rate. This means that the insurer agrees to pay the annuitant a specific amount of money on a regular basis, either for a certain period or for the lifetime of the annuitant. The interest rate is predetermined and does not fluctuate with market conditions, which brings a sense of stability and predictability to the annuity’s income stream.

This characteristic of a fixed annuity is appealing for individuals looking for a steady income, particularly during retirement, and it protects against the risk of market volatility. The assurance that the payout will not change due to external economic factors makes fixed annuities a popular choice for conservative investors seeking to manage risk.

While other options may contain elements related to different types of annuities or investment products, they do not accurately describe the core principle of fixed annuities, which is centered around guaranteed returns and predictable payouts.