Which annuity offers a guaranteed minimum rate of interest and payments that do not vary from year to year, regardless of inflation?

Which annuity offers a guaranteed minimum rate of interest and payments that do not vary from year to year, regardless of inflation?

• A. General account
• B. Interest rate guarantees
• C. Fixed annuity
• D. Deferred annuity

Answer: (C)

Fixed annuity centers on stability: it guarantees a minimum interest rate and provides a level, unchanging stream of payments over time. Because the insurer locks in a guaranteed rate and the payout amount doesn’t vary from year to year, the income remains constant regardless of how inflation or market conditions move. This predictability is the defining feature of fixed annuities, making them the choice that matches the description. Other types may tie returns to investments or adjust payments, so they don’t offer the same guaranteed, steady stream. Keep in mind that while this stability is helpful for budgeting, the fixed payments won’t automatically rise with inflation.

Fixed annuity centers on stability: it guarantees a minimum interest rate and provides a level, unchanging stream of payments over time. Because the insurer locks in a guaranteed rate and the payout amount doesn’t vary from year to year, the income remains constant regardless of how inflation or market conditions move. This predictability is the defining feature of fixed annuities, making them the choice that matches the description. Other types may tie returns to investments or adjust payments, so they don’t offer the same guaranteed, steady stream. Keep in mind that while this stability is helpful for budgeting, the fixed payments won’t automatically rise with inflation.