Fixed Annuity

The insurance company bears all investment risk. The annuitant gets the same amount of guaranteed income, usually paid monthly, for either a specified period of time or as long as he or she lives. All premiums are paid into the general account of the company.

• Advantage of a fixed annuity: you always know what you are getting.
• Disadvantage of a fixed annuity: you always know what you are getting. 

As inflation increases, purchasing power is continually reduced; therefore, the longer the fixed annuitant lives, the worse his or her standard of living will become.