PSI Ohio Insurance Practice Exam 2025 - Free Ohio Insurance Practice Questions and Study Guide

Question: 1 / 400

What is a key characteristic of a fixed annuity?

Flexible payment options

No guaranteed interest rate

Insurer pays a guaranteed minimum interest rate

A fixed annuity is characterized by the insurer's commitment to pay a guaranteed minimum interest rate to the policyholder. This means that the funds invested in the annuity will not decrease in value due to market fluctuations, providing a stable and predictable growth of the investment over time. The guaranteed interest rate offers a level of security that appeals to conservative investors who prioritize capital preservation and consistent returns.

Fixed annuities are distinct from other types of annuities that may have variable returns based on market performance or that offer flexible payment options. The security of a guaranteed minimum interest rate is a defining feature that distinguishes fixed annuities in the broader landscape of investment products.

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Investment in stocks and bonds

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