Understand Annuities Before You Buy Plain-English guides to fixed, variable, indexed, and immediate annuities — how they pay out, what they cost, and the questions to ask before signing anything.

An annuity is a contract with an insurance company: you pay in a lump sum or series of payments, and in return the insurer pays you income, either immediately or starting at a future date. Different types (fixed, variable, indexed) grow and pay out in different ways.

Fixed annuity guarantees depend on the financial strength of the issuing insurer, with state guaranty associations providing limited backstops. Variable annuities carry market risk. Safety depends on the type, the insurer, and the contract terms — always read the contract and check insurer ratings.

No. Everything here is educational and informational only, not financial, tax, or legal advice. Annuities are complex and situations differ — consult a licensed financial professional before making any decision.