Are there several variations of Annuities that I can choose from? While there are many variations of annuities, fixed annuities, variable annuities and indexed annuities are some of the most common contracts.
Fixed Annuity: With a fixed annuity, you receive a guaranteed interest rate in exchange for a certain amount of money.
Variable Annuity: On the other hand, with a variable annuity you can select the investments you put into the contract. These investments will determine your investment rate throughout the contract.
Indexed Annuity: Lastly an indexed annuity earns a return that is pegged to a market index.
Conservative investors prefer purchasing fixed annuities considering they are more risk-averse. Younger or more experienced investors may select a variable annuity so they can potentially reap the benefits of profitable gains if their investment selections do yield much.