Fixed annuities provide all of the following EXCEPT:
D. Hedge against inflation.
1. Fixed annuities offer a predetermined, set amount of income payments over a specific period or for life. This guarantees a stable source of income, typically in the form of equal monthly payments.
2. They also provide a minimum guaranteed rate of interest, ensuring that the annuitant receives a specified level of return on their investment.
3. Future income payments are a key feature of fixed annuities, as they outline the schedule and amounts of payments to be received by the annuitant in the future.
4. However, fixed annuities do not hedge against inflation. Unlike some other types of investments or annuities, fixed annuities do not typically adjust the income payments to account for inflation. This means that the purchasing power of the payments may decrease over time if inflation rises.
In conclusion, while fixed annuities offer stable income payments, a guaranteed rate of interest, and future income payments, they do not provide a hedge against inflation.
