If you think of fixed annuities and variable annuities as two ends of a spectrum, there are other types of annuities that fall somewhere in the middle and include features of both fixed and variable annuities. An indexed annuity is one of them, providing both upside potential (like with variable annuities) and downside protection through a guaranteed minimum rate of return (like with fixed annuities). Indexed annuities are a bit more complicated and typically have less attractive features like long surrender periods and less true market participation.