Let’s take a quick look at the four annuity types:
Fixed — Fixed annuities have guaranteed interest rate terms of one to 10 years
Fixed indexed — Fixed indexed annuities credit a portion of the gains of a market index like the S&P 500 and none of the losses. Principal is guaranteed.
Indexed linked — Indexed linked annuities credit a portion of the gains of a market index and protect a percentage of any losses. Principal is not guaranteed
Variable — Variable annuities have a menu of investment options called subaccount funds. Subaccount funds are similar to mutual funds. Principal isn’t guaranteed.