Who's Who In An FIA?

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How Fixed Annuities Work

An annuity is an insurance product. There are a number of parties involved in purchasing one. Let’s break those down in simple terms, in order to give you a better understanding of how fixed annuities work.

in simple terms:

Issuing Insurance Company

The company that issues the annuity is responsible for backing the annuity’s guarantees. Depending on the type of annuity and terms of the contract, they may be required to protect your principal.

Contract Owner/Annuitant

The contract owner and annuitant are typically the same person. However, in some circumstances, they can be different people. The owner is the one who makes decisions about the annuity, such as who the beneficiaries are. The annuitant, meanwhile, is the person whose life expectancy is used to calculate annuity payment.


The beneficiary is the person who receives the annuity’s death benefit. Naming at least one, if not more beneficiaries, is important. This is because, without beneficiaries, the money in your annuity could be subject to probate. A death benefit can be paid to your beneficiary without going through probate.

Want to learn more about how fixed annuities work?

An annuity may just be the right option for you.

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