What is the most common range for the guaranteed minimum interest rate in a fixed annuity?

What is the most common range for the guaranteed minimum interest rate in a fixed annuity?

• A. 1%-2%
• B. 2%-3%
• C. 3%-4%
• D. 4%-5%

Answer: (C)

The most common range for the guaranteed minimum interest rate in a fixed annuity is typically between 3% and 4%. This range reflects the balance of providing an attractive return to the policyholder while still allowing the insurance company to manage investment risks and ensure profitability. A guaranteed minimum interest rate of 3% to 4% is often viewed as sufficient to encourage clients to invest, particularly in a low-interest-rate environment. This range also aligns with the general market conditions and regulatory standards that seek to protect consumers while incentivizing insurance providers to offer competitive products. Fixed annuities are designed to provide a predictable income stream, and the guaranteed interest rate is a key element of their appeal to consumers seeking stability in their financial planning. Thus, this range serves both the needs of the consumers seeking secure investments and the insurers competing in a regulated market.

The most common range for the guaranteed minimum interest rate in a fixed annuity is typically between 3% and 4%. This range reflects the balance of providing an attractive return to the policyholder while still allowing the insurance company to manage investment risks and ensure profitability. A guaranteed minimum interest rate of 3% to 4% is often viewed as sufficient to encourage clients to invest, particularly in a low-interest-rate environment.

This range also aligns with the general market conditions and regulatory standards that seek to protect consumers while incentivizing insurance providers to offer competitive products. Fixed annuities are designed to provide a predictable income stream, and the guaranteed interest rate is a key element of their appeal to consumers seeking stability in their financial planning. Thus, this range serves both the needs of the consumers seeking secure investments and the insurers competing in a regulated market.