Types of Annuities
“Annuity” describes a broad category of insurance contracts. Different types have different objectives, mechanics, guarantees, and tradeoffs. Understanding the differences is the first step.
Income Annuities
Primarily designed to convert assets into a stream of income under specified contract terms.
Traditional Fixed Annuities
Generally provide interest according to contractual terms without direct participation in stock-market investments.
Fixed Indexed Annuities
Provide interest-crediting potential linked in part to the performance of an external market index while protecting contract value from losses caused directly by negative index performance, subject to the terms of the contract.
Variable Annuities
Use investment subaccounts and can provide greater direct market exposure, including the possibility of investment losses.
Browse the Answers
Why do some financial advisors say annuities are bad?
Some objections are about specific products and specific practices. Sorting legitimate criticism from blanket dismissal.
Read the answerWhen might an annuity be the wrong choice?
An annuity can be the wrong fit for money that needs liquidity, a short horizon, or maximum growth — but suitability depends on the type, the terms, and the job that money needs to do.
Read the answerBefore You Choose a Product, Define the Job.
See whether a modern annuity belongs in your retirement strategy — and where it may not.
The content on TheAnnuityTruth.com is educational and general in nature. It is not individualized investment, legal, or tax advice. Annuities are insurance products; product availability and features vary by carrier and jurisdiction, and guarantees are subject to the terms of the issuing insurance contract and the claims-paying ability of the issuing insurer. Annuity contracts are not FDIC insured, are not bank guaranteed, and are not a deposit or obligation of, or guaranteed by, any bank.
Last updated: 2026-09-29