What is a Fixed Annuity Plan?

Everyone is worried about their future and life after retirement. Therefore many individuals prefer taking an investment insurance plan. These plans give a great return to the individuals so that they can live a happy future. But if you are investing in annuity insurance plans then you must know the type of annuity you are buying. Some individuals prefer the Fixed Annuity Plan because it gives fixed payouts to the individuals after the expiry of the accumulation period. There are various benefits of the Fixed Annuity Plan and therefore it is preferred by most of the individuals.

Benefits of Fixed Annuity Plan

Here you can explore the various advantages of taking a fixed annuity plan in which your payout remains the same throughout the payout term.

1. Risk-Free Returns
2. Fixed Income
3. Converts into Immediate Annuity
4. Safety of Principal Amount
5. Regular Income

Risk-Free Returns

In the fixed annuity policy, the risk involved in the investment is Bourne by the company. If in case there are any market fluctuations then you need not worry. You will receive a fixed amount of payout once your payout term starts irrespective of the market fluctuations.

Fixed Income

You will receive a fixed income during the payout term and it can be on a monthly basis, quarterly basis, or yearly basis. The payout frequency has to be chosen by the insured at the time of inception of the policy. You are free to choose the payout modes as per your convenience.

Converts into Immediate Annuity

Some insurance companies will also allow you to convert the fixed annuity plan into an immediate annuity plan where you will start receiving the payouts immediately after the investment. You can either choose the payout for a limited period of time or for life.

Safety of Principal Amount

In this plan, the principal amount that is your investment always remains safe. The company will return your principal amount even if they are facing a small financial loss in a year. So, it simply means that your investment is in safe hands.

Regular Income

You will receive a regular income during the payout term without any omission of income. This income will help you to manage your future needs after your retirement. The sum of money given as the payout will be fixed and you will receive it throughout the payout term without missing a single month’s income.