Which type of annuity guarantees fixed payments?

A fixed annuity is designed to provide guaranteed fixed payments over a specified period or for the lifetime of the annuitant. This type of annuity typically involves a contract with an insurance company, where the investor makes a lump sum payment or a series of payments. In return, the insurance company commits to paying back a predetermined amount on a regular schedule, often with interest, creating certainty and stability in the income stream.

Fixed annuities are especially appealing to individuals looking for a secure source of retirement income that is not subject to market volatility, which contrasts with variable and indexed annuities that may fluctuate based on market performance or other economic factors. Lifetime annuities also provide fixed payments but focus on the guarantee of income for the duration of the annuitant’s life rather than a fixed payment schedule over a specific term.