Business and Personal Finance Dictionary

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• FIXED ANNUITY
  
  To guarantee you'll have regular income, particularly in retirement, you can buy a fixed annuity contract issued by a life insurance company. You pay the required premium, either in a lump sum or over a period of time. The insurance company invests its assets, including your premium, so there will be money available to pay you a fixed rate of return beginning at a time you select. The issuer of the annuity contract assumes the risk that you could outlive your life expectancy and therefore collect income over a longer period than anticipated. A fixed annuity differs from a variable annuity, which does not guarantee your rate of return or the amount of your future income but provides the possibility of earning a higher rate of return.
  
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