Fixed Annuity

DEFINITION of 'Fixed Annuity'

An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal.

BREAKING DOWN 'Fixed Annuity'

A fairly good financial instrument for those looking to receive a fixed investment income.

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RELATED FAQS
  1. Do variable annuities guarantee returns of principal?

    Variable annuities are subject to the ups and downs of the market, so they do not guarantee returns of principal. To mitigate ... Read Full Answer >>
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    Because they are market-based, variable annuities do not come with inherent guarantees. Investors, however, may purchase ... Read Full Answer >>
  3. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>
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