Why Are Annuity Rates Falling? 
The reason annuity rates are falling as you say is simply because interest rates are at historically low rates . Fixed Annuities are tied to the interest rates , and while they do n't necessarily keep pace with the treasury and the national prime rate they do eventually come in line . Obviously since interest rates are very low currently they are bound to go up . As that happens we will see a rise in the rates annuities pay . Variable annuities are tied to the stock market or a particular index depending on the annuity . As a result they can have a much greater return than fixed annuities , however they are also at high risk when the markets take a dive . 