Which type of annuity is guaranteed to pay a minimum percentage of the principal after an insurer's bankruptcy?

A fixed annuity is structured to provide a guaranteed return on the principal amount invested, which is a key feature that protects the policyholder. In the context of an insurer's bankruptcy, a fixed annuity typically has regulatory safeguards in place, such as state guaranty associations, that may ensure a minimum percentage of the principal is returned to the annuitant.

These types of annuities are backed by the insurer's assets and offer a consistent payment stream, making them safer in terms of guaranteed returns. This is in stark contrast to variable annuities, which are tied to investment performance and do not guarantee returns, thereby exposing the investor to market risks.

Life annuities and straight life annuities also focus on providing income for the lifetime of the annuitant but do not necessarily have the same assurances regarding the return of a minimum percentage of the principal in the event of bankruptcy, particularly if they are structured in a way that is reliant on the longevity of the annuitant rather than the safety of the investment.

Therefore, the fixed annuity is uniquely positioned with guarantees that protect the principal investment, aligning with the question's focus on minimum percentage payouts.