What is a Fixed Annuity? - Definition, Pros & Cons


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Which of the following benefits of fixed annuities is also a risk?

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1. What is the longest amount of time a fixed life annuity will pay you a fixed income?

2. Why is receiving a fixed income with an annuity also a risk?

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About This Quiz & Worksheet

This quiz/worksheet combo lets you see if you know the different types of annuities. You will need to identify the commonly cited risks and benefits of this type of insurance.

Quiz & Worksheet Goals

Use these questions to measure your knowledge of:

  • Fixed life annuity terms
  • Common customers for a life annuity
  • The benefits and risks of a fixed annuity

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the material, such as annuity elevators that pay more if you develop a serious illness or injury
  • Making connections - use understanding of the concept of annuities to explain why receiving a fixed income annuity is also a risk
  • Information recall - access the knowledge you've gained regarding how long a fixed life annuity will pay out

Additional Learning

To find out more about this type of insurance payout, review the lesson titled What is a Fixed Annuity? - Definition, Pros & Cons. This lesson will explain new topics, such as:

  • Common costs for an annuity
  • Spousal risks from annuities
  • Other retirement options