Comparing Annuity Types: A Field Guide
The main annuity types are fixed and MYGA, fixed index, variable, registered index-linked (RILA), immediate income (SPIA), and deferred income (DIA and QLAC). Fixed and indexed annuities protect principal, variable and RILA trade protection for more upside, and income annuities convert savings into a paycheck for life. The right type depends on the job you need done.
Walking into the annuity world for the first time can feel like walking onto a car lot without knowing the difference between a sedan, a pickup truck, and a sports car. They are all vehicles. They are not remotely interchangeable, and buying the wrong one for the job you actually need done is a genuinely expensive mistake. A pickup is a bad commuter car and a sports car is a terrible way to move gravel, but neither is a “bad vehicle.”
Annuities work the same way. This field guide is the plain-English map of the lot: what each type is built to do, where it shines, and where it does not. By the end you should be able to point to the two or three types worth a closer look for your situation, and rule out the rest with confidence.
Why is “annuity” a category, not a product?
“Annuity” describes a broad family of insurance contracts, not one specific thing. Some are built for steady, predictable growth. Some convert savings into income you cannot outlive. Some trade a chance at bigger upside for real market risk.
When someone tells you flatly that “annuities are good” or “annuities are bad,” they are almost certainly thinking of one specific type, not the whole category.
That is exactly why a comparison like this one matters before you shop any actual products or the broader annuities hub.
The six annuity types at a glance
Here is the whole lot in one view. Read the “best fit” column first, then work backward to the mechanics.
| Type | What it does | Growth potential | Downside risk | Best fit |
|---|---|---|---|---|
| Fixed / MYGA | Locks a fixed rate for a set term, like a CD’s insurance-company cousin | Modest, known upfront | No market risk to principal; liquidity limited during the term | Savers who want a guaranteed rate and can leave the money alone |
| Fixed index (FIA) | Growth linked to a market index, with a floor against loss | Moderate, capped or participation-limited | No downside from the index; caps and spreads limit upside | Savers who want some upside without direct market exposure |
| Variable | Invests directly in market subaccounts inside an insurance wrapper | Highest upside of the group | Real market risk to principal; typically the highest fees | Investors comfortable with market swings who want tax deferral |
| RILA | Splits the difference: a buffer or floor absorbs some loss for more upside | Higher than an FIA, lower ceiling than variable | Some market loss beyond the buffer or floor | Buyers who want more upside than an FIA and can stomach limited loss |
| Immediate income (SPIA) | Converts a lump sum into payments that start almost right away | Not growth-focused; the return is the income stream | Little to no liquidity once payments begin | Retirees who need a paycheck starting now |
| Deferred income (DIA / QLAC) | A lump sum today buys a larger paycheck that starts years later | Not growth-focused; higher payout for waiting | Money is committed and largely illiquid until payments start | Buyers planning future income, or delaying required withdrawals |
Three numbers anchor the sections below:
The growth-focused types: fixed, indexed, variable, and RILA
The four growth types line up on a single spectrum: the more protection you want, the more upside you give up. Here is each one, with its honest downside stated plainly.
Fixed and MYGA annuities
Fixed index annuities (FIA)
Variable annuities
Registered index-linked annuities (RILA)
For a head-to-head on the two ends of this spectrum, our fixed vs variable annuity guide goes deeper.
The income-focused types: immediate and deferred
Income annuities are not really about growth at all. They are about turning a pile of savings into a paycheck, and they come in two timing flavors.
Immediate income annuities (SPIA)
You hand over a lump sum and payments start almost right away, for a set period or for life. The honest downside: once payments begin, most of that money is no longer available as a lump sum, so a large SPIA can leave you cash-poor if your plans change.
Read more
Deferred income annuities (DIA) and QLACs
You commit a lump sum today and payments start years later, which buys a larger paycheck for the wait. A QLAC is a special DIA built around a tax rule: it lets you delay required minimum distributions on the money used to buy it, up to a lifetime premium limit of 210,000 dollars for 2026 (per the SECURE 2.0 inflation adjustment). The honest downside: your money is committed and largely out of reach for years before any income arrives, and in a basic version, dying before payments start can mean little or nothing comes back unless you added a refund feature.
Read more
What an immediate annuity actually pays. As of September 2, 2026, a single 65-year-old man could receive roughly 679 dollars a month per 100,000 dollars on a single-life SPIA, based on immediateannuities.com quotes shown on our income rates page. Your number varies by age, gender, and options, so treat this as a reference point rather than your quote.
Our immediate vs deferred annuity guide covers the timing trade-off in full, and the income annuities hub maps every version.
Which annuity type fits which person?
The fastest way to narrow the lot is to match the type to the job you actually need done. Find the row that sounds most like you.
| If your goal is… | Start by looking at… | Because… |
|---|---|---|
| A guaranteed rate on money I can leave alone | Fixed / MYGA | Simple, predictable, no market guesswork |
| Some market upside but no risk to principal | Fixed index (FIA) | A floor against loss with capped growth |
| More upside, and I can accept limited loss | RILA | A buffer trades some protection for a higher ceiling |
| Maximum growth with tax deferral, market risk is fine | Variable | Direct market exposure inside the wrapper |
| A paycheck starting now that I cannot outlive | Immediate income (SPIA) | Converts savings into lifetime income today |
| A larger paycheck later, or to delay RMDs | Deferred income (DIA / QLAC) | Waiting buys more income; a QLAC also defers RMDs |
How to actually choose
Choosing an annuity type is a matter of starting with the job, not the product, and working through it in order.
Name the job in one sentence
Decide how much market exposure you can accept
Decide when you need the money to work
Check the timeline for the cash itself
Compare real, named products
How soon are you retiring?
Two quick scenarios
Two retirees, same balance, two right answers. The first wants a guaranteed rate on money she will not touch for seven years, and does not want to think about the market at all. A MYGA is built almost exactly for that job. The second has maxed out his 401(k) and Roth IRA for years, is a decade from retiring, wants continued tax deferral, and is comfortable with market swings for higher long-term growth. A variable annuity, or possibly a RILA, is worth exploring for him, with the fee structure examined closely first.
Same category of product, two very different right answers. That is the whole reason this comparison exists instead of a single universal recommendation. A car lot does not have one “best car,” and the annuity lot does not have one best type.
Whichever type feels closest, a short, no-pressure conversation with a Certified Annuity Advisor is the fastest way to confirm the fit before you compare specific carriers and rates.
Want a straight answer from a real person?