A fixed annuity is a contract between you and and an insurance company which is defined by a set interest rate. This rate is fixed for the first year in which the annuity is issued. After the first year, the issuing insurance company backing the annuity can either raise or lower the interest rate on a yearly or multi-year basis. Interest rates are generally not lowered below a guaranteed minimum. Taxes are deferred until withdrawal, and there is no upper limit on contributions.
Fixed annuities come with a guarantee that the principal cannot be lost unless the insurance company fails. The owner of beneficiary can start making withdrawals of up to 10% of the annuity’s value if they are over age 59½ of age. If you are under age 59½ year of age, their is a penalty for early withdrawal.
A withdrawal of more than 10 percent from the annuity contract in a single year will result in a surrender charge paid to the insurance company. Generally, charges and penalties decrease each year until the value of the annuity is 0, usually within 10 years.
If you own an annuity, you may:
- withdraw money in a lump sum
- withdraw money systematically over time until the account is depleted
- annuitize the contract 
Risks Associated with Fixed Annuities
- The failure of the issuing annuity provider 
- The loss of spending power if the annuity’s interest rate falls below the rate of inflation.
- The possibility that the insurance company may not be obligated to repay a surviving spouse if an annuitant dies after only receiving a few monthly payments.
For more information contact us today and ask for your free no-obligation quote.We will help you explore a variety of insurance options and discounts. Call us at +1 800 645 0297 or email us. Alternatively, have an insurance-licensed Sunvalley Insurance representative contact you.
 Annuitizing an annuity contract means that you can take monthly distributions for a set time period, or for the rest of your life or the life of your spouse, even if those distributions exceed the principal contributed and interest earned. [Also see: What is an Annuity?]
 Unlike bank accounts, annuities are not guaranteed by the FDIC, or any federal agency.