SIE: Fixed Annuities

Fixed Annuities

Fixed annuities are often compared to CDs (certificates of deposit) because they have similar features. In a fixed annuity, the customer’s investment is deposited into the insurance company’s general account. This means that the insurance company is responsible for investing the customer’s money as it sees fit and for providing a fixed payment over the customer’s life. The insurance company thus bears the investment risk, and it is the insurance company’s obligation to pay the fixed rate.