Fixed Annuity Guarantees
Fixed annuity guarantees can be attractive, but be aware of all the fine print in the contract before signing on the dotted line. Below are some interesting facts about guarantees of fixed annuity pros and cons:
Guarantee is generally on the annuity’s actual market value and the interest rate over a given period, assuming it’s held for the specified time frame.
"Guarantee", in this case, essentially means "safety of principal" plus a set interest rate.
A Market Value Adjustment (MVA) may be assessed if you liquidate the contract prior to term.
The MVA may be a positive or negative dollar value adjustment to the contract value, in most cases whether the annuity is terminated early or held past the surrender phase.