What is the main advantage of a hybrid annuity?

A hybrid annuity is designed to provide a blend of features from both fixed and indexed annuities, which is why the correct answer highlights this combination. This structure allows policyholders to benefit from the stability and guaranteed returns typical of fixed annuities while also offering the potential for higher returns linked to market performance, similar to indexed annuities.

By incorporating aspects of both types, hybrid annuities aim to balance safety and growth potential, making them appealing to investors looking for a more tailored approach to their retirement savings. This unique structure offers flexibility, as it can cater to varying risk tolerances and investment goals.

The other options do not accurately describe hybrid annuities. They do not guarantee higher returns than fixed annuities or eliminate risks entirely, nor are they solely reliant on stock market performance. Instead, the hybrid nature is what makes them particularly advantageous for a diverse range of investors seeking both security and growth possibilities.