What is a two tiered annuity?

A two-tiered annuity is a financial product that combines features of both fixed and variable annuities, offering two distinct phases or tiers of payouts. In the first tier, the annuity may provide a guaranteed interest rate for a set period, while the second tier allows for potential growth linked to market performance or other variables. This structure aims to balance stability and growth, catering to different investment needs and risk appetites. It can be a suitable option for individuals seeking both security and the potential for higher returns over time.