Fixed Annuity

Definition - What does Fixed Annuity mean?

Fixed Annuity is an insurance contract where the insurance company guarantees fixed payments to the annuitant usually until the annuitant’s death.

Testopedia explains Fixed Annuity

A fixed annuity will offer the annuitant a guaranteed rate of return but that rate of return may not sufficient to keep pace with inflation. A fixed annuity will not subject the annuitant to principal risk but the annuitant will be subject to purchasing power risk.

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