Direct answer
A fixed annuity provides monthly income by converting a lump-sum payment into a series of guaranteed payments based on a fixed interest rate and the contract term you choose. It depends on whether you select a life-only payout, which ends at death, or a period-certain payout that continues for a set number of years.
Standard actuarial payout tables and insurance contract regulations regarding guaranteed minimum interest rates. For additional information about state-level annuity regulations and consumer protections, see the National Association of Insurance Commissioners‘ resource center.
What this means for you
A fixed annuity provides monthly income by converting a lump-sum payment into a series of guaranteed payments based on a fixed interest rate and the contract term you choose. It depends on whether you select a life-only payout, which ends at death, or a period-certain payout that continues for a set number of years.
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