Sales of fixed annuities rose 35 percent this year.

July 18, 2008

Sales of fixed annuities rose 35 percent this year.

In what's likely a symptom of a sagging stock market, estimated sales of fixed annuities rose 35 percent in the first quarter of 2008 versus a year earlier, according to statistics compiled by Beacon Research. Fixed annuities, which are sold by insurance companies, essentially convert a lump sum into a steady stream of payments over the life of the annuity, thereby imparting some measure of comfort and security to the investor. They come with a few strings, however: The internal fees on annuities are generally higher than those associated with mutual funds, and you could be hit with some pretty steep penalties if you decide you no longer want the annuity. So do your homework first.