What are the Different Types of Fixed Income Annuities?

There are numerous types of fixed income annuities, and while it would be problematic to try and list each and every variation, we have compiled a list of the most common.  Each of these different types of fixed annuities may have numerous strategies associated with them and will vary from company to company.  These types of annuities are also not mutually exclusive.  Some contracts will combine several of the following fixed annuities.

Annuity Certain - this is annuity contract in which the recurring payments are made for a definite period of time and are not dependent upon the lifespan of an individual.

Cash Refund Annuities - this is a type of refund that pays the annuitant's defined beneficiary the difference, if any, of the purchase price of the annuity and the sum of the payouts to the deceased annuitant.

Equity-Indexed Annuities - a type of fixed annuity that has a guaranteed minimum interest rate and also offers a bonus dependent upon an equity index (market conditions).

Installment Refund Annuity - this type of annuity contract promises to continue to provide benefits to a beneficiary if the annuitant dies before recouping the purchase price of the annuity.  The payments will generally continue until the full cost of the annuity has been refunded.

Joint and Survivor Annuity - similar to a joint annuity, this is an agreement in which the fixed annuity covers the life of two or more individuals.  This annuity continues to make payments for as long as any of the covered individuals live.

Joint Annuity - this type of fixed income annuity covers the life of two or more individuals and terminates at the first death of those covered.

Life Annuity - this is an agreement upon which the payments are based upon the life of an individual.  Payments in a lifetime annuity stop upon the death of the designated individual.  This type of fixed income annuity is also referred to as a whole-life annuity or a single-life annuity.

Life Annuity Certain - this type of fixed income annuity provides a determined number of payments regardless of whether the individual lives or dies.  The contract will also continue for the duration of the annuitant's life if they live beyond the predetermined payment period.

Modified Cash Refund Annuity - this type of annuity is a variation on the traditional refund annuity.  When an annuitant dies before receiving the full amount of retirement benefits equal to their contribution, the remainder will be distributed to the annuitant's beneficiary.

Pure Annuities - an agreement that simply provides periodic payments for the duration of an individuals life, and terminates at the individual's death.

Refund Annuity - a refund annuity is any type of annuity that also promises to return a portion or all of the purchase price of the annuity.

Temporary Life Annuities - this is a modified life annuity in which the contract is determined on the life of an individual for a set period of time.  The contract terminates at the earlier of either death or the end of the determined period.