Types of Annuities Explained
Types of annuities split into two jobs: income or accumulation. SPIAs turn a lump sum into a paycheck. Deferred contracts — fixed, MYGA, FIA, or variable — grow money first, then you withdraw or turn on income later.
“Understanding these product types helps you match the right annuity to your income goals, time horizon, and risk tolerance.”
The types of annuities shoppers compare most often — fixed, MYGA, fixed indexed, variable, and SPIA — are not interchangeable labels on the same product. A MYGA answers how much guaranteed growth you can lock in for a set term. A SPIA answers how much monthly income your lump sum buys today. An FIA trades a cap on upside for a floor on market losses. Pick the wrong category and you will compare numbers that were never meant to match.
The first decision is income or accumulation. Need a paycheck from the contract — now or later — and you are in income territory (SPIA for now, deferred plus an income rider for later). Need the money to grow first and stay accessible on your timeline, and you are in accumulation (fixed, MYGA, FIA, or variable). Use the annuities guides below to understand each type. When you know the category, we illustrate fixed, MYGA, FIA, and SPIA designs across 30+ A-rated carriers on the same premium, term, and state.
Key Takeaways
Fixed and MYGA. Declared or guaranteed crediting rates with principal protected from market loss — best when you want predictable growth for a set surrender period.
Fixed indexed (FIA). Index-linked crediting with a floor (often 0%) and upside limited by caps or participation rates — best when CDs feel too low but full market risk is off the table.
SPIA. Lump sum in, income starts within about a year — best when you need a paycheck now and want the carrier to carry longevity risk.
Variable. Subaccounts move with markets; no principal floor and typically the highest fee load — best only after essential income is covered elsewhere.
Income vs accumulation. Income soon (SPIA) or later (deferred plus income rider) versus grow first, then withdraw — same person may use both at different life stages.
Not FDIC. Annuities are insurance contracts backed by the issuer and state guaranty associations within limits — not bank deposits.
Product types
Fixed, indexed, MYGA, and SPIA contracts—each with different risk, growth, and income profiles.
Fixed annuity
Fixed annuities trade upside for predictability. Learn when a guaranteed rate helps and when another annuity type may fit better.
Learn more →Fixed indexed annuity (FIA)
FIA illustrations can look similar while contracts work very differently. See what caps, participation, and floors really change.
Learn more →MYGA
A MYGA can look like a CD with tax deferral, but surrender rules matter. Learn what to compare before locking in.
Learn more →SPIA
Immediate income sounds simple until payout choices become permanent. See what to decide before turning savings into payments.
Learn more →Guides
Fundamentals, taxation, payouts, and beneficiaries.
How do annuities work?
The hardest annuity decision is not the definition. Learn how accumulation, payouts, and timing change what the contract does.
Learn more →Annuity taxation
Tax deferral is useful, but withdrawals can surprise people. See how qualified, non-qualified, and inherited annuities are taxed.
Learn more →Fixed, indexed, and variable — how money is credited
LIMRA reported $464.1 billion in U.S. annuity sales in 2025 — spread across MYGAs, FIAs, variable contracts, and immediate income products. The type you pick determines which part of that market you are actually shopping.
Deferred annuities are grouped by how the account earns: a declared rate, index-linked crediting, or variable subaccounts. Fixed contracts credit a rate the carrier declares for a period. MYGAs guarantee that rate for the full term you select. FIAs credit based on index performance subject to a floor and a cap, participation rate, or spread. Variable contracts allocate premium to subaccounts that rise and fall with the market.
This page focuses on fixed, MYGA, FIA, and SPIA — the categories most shoppers use for guarantee-first retirement planning. Variable annuities are summarized below so you know how they differ before a prospectus-level decision with licensed help.
Income vs accumulation
Income means turning premium into a paycheck — now or later. Accumulation means growing the money inside the contract first, then withdrawing or turning on income when you are ready.
Immediate annuities start income within about a year of purchase. A single premium immediate annuity (SPIA) is the common form: one deposit, payments begin within 30 days, and the premium is no longer a liquid balance once annuitized.
Deferred annuities accumulate first. You fund the contract, credited interest or index-linked gains build account value during the deferral years, and you take withdrawals, annuitize, or activate an income rider later. For accumulation phases, surrender schedules, and payout mechanics, see how annuities work.
Types of annuities compared
The five types of annuities differ by whether you are accumulating value or converting premium to income, how earnings are credited, and whether principal is protected from market loss. Use this table to match your goal to the right guide.
| Type | How value builds | Principal vs market | Typical next step |
|---|---|---|---|
| Fixed | Declared rate from the insurer | Protected from market loss | Fixed annuity |
| MYGA | Guaranteed rate for a set term | Protected from market loss | MYGA |
| FIA | Index-linked crediting, floor on losses | Not invested directly in stocks; upside capped | Fixed indexed annuity |
| Variable | Subaccounts track markets | Account value can fall; no floor | Review prospectus, fees, and riders with licensed help |
| SPIA | No accumulation — premium converts to income | Income guaranteed per contract terms; premium is not a liquid balance | SPIA |
Variable annuities (short version)
Variable annuities put premium in subaccounts. When markets fall, account value can fall with them. Costs are usually higher than fixed or indexed chassis: mortality and expense, subaccount fees, and optional income riders often combine to roughly 1.5%–3.5% all-in when riders are stacked.
They can fit long horizons and clients who want market exposure inside a tax-deferred insurance contract — after essential income is covered elsewhere. This hub routes you to fixed, MYGA, FIA, and SPIA guides for guarantee-first shopping; variable work is illustration- and disclosure-heavy, so compare with a licensed professional.
New to annuities altogether? Read what are annuities? first, then return here to pick a type.
Which annuity type fits your goal?
Income or accumulation — that is the fork. Everything else follows from which side you are on.
- Income now: SPIA — lump sum becomes a paycheck; payout option and guarantee period are set at purchase.
- Income later: Deferred FIA with an income rider — grow first, turn on a lifetime paycheck when you choose.
- Accumulation, guaranteed rate: Fixed or MYGA — principal protected, published or guaranteed rate for the surrender period you select.
- Accumulation, index-linked upside: FIA — floor on market losses, caps or participation limits on gains.
- Accumulation, full market exposure: Variable — only after income needs are covered elsewhere.
When you are ready for numbers, use annuity rates and carrier comparisons.
Expert Tip: How I pick the annuity type
I start with one question: do you want income or accumulation? Income now points to a SPIA. Income later on money that can grow first points to a deferred contract with an income rider. Accumulation points to MYGA, fixed, FIA, or variable depending on how you want the money to earn. That fork gets you to the right product type before we compare carriers.
—Brad Cummins, Insurance Geek Founder
Is an annuity the right category for you?
Most buyer regret we see is a category mismatch — funding a deferred FIA with money needed in three years, or buying a SPIA before exploring whether a MYGA or FIA with an income rider fits better.
This is right for you
- You want guaranteed or index-linked growth with tax deferral on money you can leave in place through the surrender period
- You need income you cannot outlive — now (SPIA) or later (deferred plus income rider)
- You have maxed qualified retirement accounts and want more tax-advantaged accumulation
- You are comparing carriers on the same product type, premium, and term — not mixing MYGA rates with FIA caps
This is not right for you
- You need full access to the principal within the next few years
- You have not maxed 401(k) and IRA contributions and still have room there
- You want uncapped market returns without insurance contract fees
- You are shopping headline rates across different product types as if they measure the same thing
Before you commit
Before you fund any annuity, our agents walk clients through the same checks on every case:
- Timing: Do you need income within a year (SPIA) or can the money stay deferred through the full surrender schedule?
- Goal: Are you buying for guaranteed accumulation, index-linked growth, or lifetime income — and if income, when should it start?
- Liquidity: Can you leave the premium in place without a full withdrawal before surrender charges end? Most deferred contracts allow about 10% out per year without a penalty.
- Same assumptions: Compare illustrations on the same premium, term, state, and product type — not a MYGA guarantee against an FIA cap.
- Taxes: Non-qualified growth is tax-deferred until withdrawal; qualified money follows retirement account rules. See annuity taxation for your situation.
There are dozens of annuity carriers and hundreds of product combinations. Finding an annuity is not the hard part. Narrowing them down to the right type and carrier for your goals is.
That's where we help. Fill out the form below and tell us what matters most — guaranteed rate, index strategy, income start date, or a combination. We'll compare the leading carriers and products available in your state, narrow the market down, and present you with a few best-fitting options. You don't have to sort through hundreds of annuities yourself — that's what we do every day.
Compare annuity illustrations
Compare MYGA rates, FIA caps, and SPIA payouts across 30+ A-rated carriers on the same premium, term, and state.
Conclusion
If you're on this page, you're probably comparing types before you've picked a category — and that's the right order. Our agents see buyers who start with a rate they saw online and work backward to a product type. A MYGA guarantee and an FIA cap are not the same decision. The regret we see most is funding the wrong chassis: deferred growth when income was needed this year, or a SPIA when a few more years of tax-deferred accumulation would have fit better.
Once you know whether you need guaranteed growth, index-linked upside, or immediate income, the carrier comparison gets straightforward. We'll run MYGA, FIA, and SPIA illustrations in your state on identical assumptions — so you're choosing between designs that fit the same goal, not headline numbers from different product types.
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