There are many different types of annuities.  

There are immediate and deferred annuities.  Both of which can have either fixed or variable rates.   Additionally, annuity funds can be invested in or out of a stock market index. 


Due to the many different annuity types, many people perceive annuities as complex investment products.  We’re here to help break that conception.  

Below we explore the different types of annuities available and explain how these investment vehicles can help you grow more income throughout retirement. 

Annuity Quotes & Illustrations

Different Types of Annuities

There are two main types of annuities, immediate and deferred.

Immediate Annuity

An immediate annuity forms through a single, one-time lump-sum premium payment. Because the annuity is fully funded, all the benefits of the annuity become immediately available. You may begin taking income distributions right away or delay payments into the future.

Immediate annuities are great for individuals looking to roll-over other investments such as a 401K or IRA.  

Deferred Annuity

A deferred annuity loads your investment over time through a series of premium payments. Often over several years. The benefits of the annuity are postponed or deferred into the future.

Deferred annuities allow you to build up your retirement income over time without straining your budget.

Different Types of Annuity Rates

Annuities further differentiate by interest rates. 

Fixed Annuity

A fixed annuity provides a fixed rate of return on your investment. A fixed-rate annuity contract will clearly state your investment duration and the rate at which your investment will grow. This type of annuity is ideal for those seeking a low-risk retirement investment. Your money stays protected from market exposure and higher interest rates than CDs or Bonds.

Variable Annuity 

A variable annuity provides variable rates of return on your investment, typically based on stock market fluctuations.  This type of annuity has the potential for higher yields when the market is high; however, dips in the market can result in no-growth or even capital losses.   

Helpful Resources

Understanding Annuities

How Do Annuities Work?

Immediate Annuity

Deferred Annuity

Fixed Annuity

Variable Annuity

Indexed Annuity

Retirement Annuities

Qualified vs Non-Qualified Annuities

Compare Annuity Companies


Indexed and Non-Indexed Options 

The third way annuities differentiate is whether the funds are invested in or out of a stock market index. 

Indexed Annuity

Indexed annuities place your investment funds inside a stock market index.  Your investment grows in relation to the performance of that particular index. These types of annuities do carry market exposure; however, they also have real growth potential.  Many insurance companies offer flexible options that allow you to participate in market gains and protect your money when the market is down.  

Non-Indexed Annuity

A non-indexed annuity is exactly what the name implies. Your annuity investment funds are not placed inside a stock market index; therefore, funds avoid market exposure. Typically this annuity type has fixed interest rates and focuses on protection more than growth.  

What Type of Annuity is Right For You?

The answer to that question depends on your current financial situation and the goals you have for retirement.   

While some people are looking to protect their retirement nest egg, others are looking for growth on their investment.  An annuity can do both.  The key is to find the right one.  The best way to do so is to work with an independent agent to help you navigate your many options.