Definition of a Fixed Annuity

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A fix annuity is an agreement between two parties where one party will pay money or services at a future date. Research various fixed annuities to determine different restrictions and stipulations with information from a portfolio manager in this free video on finance.

Part of the Video Series: Credits, Stocks & Pension
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Video Transcript

Are you considering investing your money in a fixed annuity? Well really what is that? Hi this is Roger Groh at Groh Asset Management. A fixed annuity is just an agreement between you and someone else or a bank or an insurance company or another institution where they are agreeing to pay you money at some point in the future or services, could be cash, it could be services, just depends upon how that agreement is written. It's pretty simple, pay them today, they invest it, they intend to pay you out money in the future. So a fixed annuity is really a loan that you have made to another group where they are agreeing to pay you fixed dollar amounts at some point in the future. The amount that they pay you and the dates in which they pay you vary depending upon the type of fixed income annuity that you buy. They differ widely, it makes great sense to read the prospectus before putting any money in these. Be very careful about the health of the insurance company or bank that you're thinking about investing with. Not all annuities are insured by the United States government or anyone else and you in theory could lose all of the money that you've invested in an annuity if that bank or insurance company goes under. Be careful. I'm Roger Groh with Groh Asset Management and thank you very much for spending time with me.


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