fixed annuity

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A fixed annuity is a type of annuity where the insurance company agrees to pay a specific periodic amount to the policy holder no matter the outcome of their investments. This is to be contrasted with variable annuities where payment amounts will depend on the performance of the investments. Because the insurance company is promising to pay a certain amount no matter what, fixed annuity investments are controlled by the insurance company to ensure stable and safe investments. 

[Last updated in July of 2021 by the Wex Definitions Team