Chapter 3. Fixed rates


“An investment in knowledge always pays the best interest.”

 --Benjamin Franklin

If your dog or cat could talk, they probably would tell you that they are not too thrilled about being “fixed.” But when it comes to a guaranteed fixed rate on their annuities, owners are pretty happy with the security of knowing that the rate of return they will be receiving from their annuity is fixed. People equate a fixed rate with a safe and secure investment. But fixed has a different meaning to the insurance companies issuing the fixed rate annuity than it may to you.

Insurance companies go by their version of the Golden Rule, which is that since they have the gold, they get to make the rules. And, according to their rules, the fixed interest ...

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