Fixed benefits refer to fixed amounts of cash payments made to beneficiaries during a specified period of time on a regular basis.
The payment amount is stated in the insurance contract and does not vary.
Annuities and life insurance are often structured with fixed benefits.
One of the main attractive features of such types of benefits is that they ensure that someone (beneficiary) would receive a constant stream of income no matter the financial status.
This can be extremely ideal for retirement planning as retiree would no longer have a stable stream of employment income for living expenses.
Fixed benefit insurance policies are often compared to indemnity based policies.
The former offers cash payments as benefits, while the latter offers reimbursements of expenses as benefits.
People typically purchase fixed benefits plans for retirement planning, and indemnity plans to cover medical expenses in the event of health problems.