Fixed Annuities

This course offers a comprehensive look at fixed annuities, both traditional and indexed. It explains the basics of annuity products, and discusses the various features, provisions, benefits and limitations of these unique products. It explains how fixed annuities are designed, how they function, how their values grow and how those values can be distributed, through annuitization and/or withdrawals. The course examines many common index-linked interest crediting methods associated with indexed annuities, as well as how insurers invest for both traditional and index-linked interest crediting. The course also includes a discussion of annuity taxation as it pertains to withdrawals, annuitization, and Section 1035 exchanges. Concluding the course is a chapter on annuity suitability, which offers guidelines on how producers can ensure that the annuity products they recommend for their clients are suitable and appropriate.  

The course includes the following chapters:
  • Overview of Annuities
  • Traditional Fixed Annuities
  • Indexed Annuities
  • Using the Annuity for Income
  • Taxation of Annuities
  • Annuity Suitability and Disclosure Practices
This is an intermediate level course. Upon completion, students will be able to:
  • Explain the purpose and function of annuities, immediate and deferred
  • Describe the differences between traditional fixed annuities and indexed annuities
  • Explain how fixed and indexed annuity values grow
  • Outline how annuities can be used for tax-deferred accumulation and lifetime income
  • Demonstrate an understanding of the tax treatment of annuities at all phases: during accumulation, during payout, and at death
  • Describe the benefits and drawbacks of fixed annuities, and when they may—and may not—be suitable for consumers