Fixed Income

Updated: 09 June 2023

What Does Fixed Income Mean?

A fixed income is income that is paid in regular periodic intervals without an individual having to do any additional work. Typically, fixed incomes are created through investments or other financial vehicles that reach maturity after a length of time passes. In the context of insurance, certain types of life insurance have options to generate a fixed income after premium payments are made for a long enough time.

Insuranceopedia Explains Fixed Income

Many elderly people live on fixed incomes. For example, social security payments and pensions are two major sources for the elderly. As for insurance, universal and whole life insurance often offer policyholders the option to invest money derived from their policy's interest that builds up over time. These investments can contribute to the cash value of the policies and may also be recuperated at a later period as a fixed income. Investments made in stocks that increase in value over time or pay dividends are two sources of potential cash value growth for the policy investments.

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