Comparing Common Annuity Types
Pending compliance review · Last reviewed October 11, 2026
Short answer: Annuity types differ in how they credit growth, the risks you carry, and their fees. The right fit depends on your goals and comfort with risk.
Fixed and fixed indexed
Fixed annuities credit a declared rate. Fixed indexed annuities credit interest based on an index, within caps or participation rates, and typically protect against index losses.
Variable
Variable annuities invest in subaccounts with market risk, including possible loss of principal, and often have higher fees. They are sold by securities-licensed professionals.
Immediate income
Single premium immediate annuities exchange a lump sum for income that starts right away, usually with limited access afterward.
| Type | Growth | Market loss risk | Typical access |
|---|---|---|---|
| Fixed | Declared rate | No direct market risk | Limited during surrender period |
| Fixed indexed | Index-linked, limited by caps | Protected from index losses | Limited during surrender period |
| Variable | Market-based | Yes — principal can decline | Limited; fees apply |
| Immediate | Income payments | Depends on contract | Usually very limited |
Frequently asked questions
Do fixed indexed annuities earn stock market returns?
No. Interest is linked to an index but limited by caps or participation rates, and you aren’t invested in the market.
Related guides
Annuities are long-term insurance contracts. They are not bank deposits, not FDIC insured, and guarantees depend on the issuing insurer’s claims-paying ability and contract terms. Surrender charges, fees, and taxes may apply. Not tax or legal advice.