In a fixed annuity, which guarantee is provided during the accumulation period?

In a fixed annuity, which guarantee is provided during the accumulation period?

• A. Variable interest rate tied to market
• B. Guaranteed fixed interest rate during accumulation
• C. Inflation-adjusted rate
• D. Crediting rate depends on insurer's capital

Answer: (B)

In a fixed annuity, the money you contribute earns interest that is guaranteed by the insurer at a fixed rate during the accumulation period. This means the cash value grows predictably no matter how markets perform, because the rate is set in the contract and is guaranteed by the insurer. The growth is not tied to market indices, so you won’t see upside tied to market fluctuations. It also isn’t based on inflation, unless a separate rider is added, and the credited rate isn’t determined by the insurer’s current capital position but by the guaranteed terms of the contract.

In a fixed annuity, the money you contribute earns interest that is guaranteed by the insurer at a fixed rate during the accumulation period. This means the cash value grows predictably no matter how markets perform, because the rate is set in the contract and is guaranteed by the insurer. The growth is not tied to market indices, so you won’t see upside tied to market fluctuations. It also isn’t based on inflation, unless a separate rider is added, and the credited rate isn’t determined by the insurer’s current capital position but by the guaranteed terms of the contract.