What The Difference Between Fixed And Variable Annuities? 
The difference between fixed and variable annuities is that fixed annuities guarantee a certain rate of return for a set period of time -LRB- it could be for a number of years , or for life -RRB- . With fixed annuities , the insurance company takes on the risk to ensure that rate is paid to the annuity owner . Variable annuities have the potential to return higher payments because they are invested in securities such as stocks , bonds , and/or money markets . However , they also have the potential to lose money -LRB- although there is usually a sub account offered that has a guaranteed return -RRB- . The risk is on the shoulder of the annuity owner , not the insurance company . 