How Do Fixed Income Annuities Work? 
A fixed income annuity is a contact with a life insurance company . In exchange for a sum of money the company promises to pay a monthly income to you for the balance of your life . The first major variation of this contract is a deferred fixed income annuity . The difference is that the sum of money is not applied immediately but deferred until a later date . There are many other variations of an annuity to include payments that are guaranteed for a specified period of time or payments that last through the lifetime of two people . 