What Kind Of Annuities Are Out There? 
There are many different kinds of annuities offered by many different insurance companies . Each annuity has its own features . I typically group annuities into four main categories . Immediate Annuities : This is an annuity that begins a payment stream upon purchase or shortly thereafter -LRB- within a year -RRB- . The payment is guaranteed for a period of time or for a lifetime -LRB- or lifetimes in the case of a joint payout -RRB- . Variable Annuities : This annuity has tax deferred growth that is based on the performance of the sub-accounts within the contract . The owner of the annuity can choose which accounts to allocate their funds . The performance of the annuity can be either positive or negative so an owner is assuming some level of investment risk . Fixed Annuity : This annuity has tax deferred growth that is set for a fixed period of time . The interest rate of the annuity is usually set at the purchase date but can be adjusted at a later date in some contracts . The performance is usually a known outcome and highly dependent on the length of the annuity contract . Indexed Annuities : This annuity has tax deferred growth that is based on the performance of an particular index -LRB- es -RRB- . The owner can choose which index -LRB- es -RRB- to allocate their funds such as the S&P , but their funds are n't actually invested in that index . The index is only used to determine the performance . The performance of indexed annuities are usually only zero or higher with a limit on the upside known as a `` cap . '' These are general definitions and are by no means suggesting which is better or more appropriate for any situation . My recommendation , if you are interested in learning more about annuities , is to speak with a professional licensed to describe the pros and cons of each annuity type based on your particular situation . 