Fixed Annuity
This is an annuity in which the insurer makes payments to the investor for the term of the contract, which can be either a specified number of years or until the investor's death. Both the income and the principal are guaranteed. Such annuities are fairly straightforward, but investors need to consider the underlying expenses of the annuity, the interest rate paid and the credit quality of the insurer. As in the case of a bond, if the insurer goes bankrupt, investments in a fixed annuity will be at risk.
