You will find two fundamental kinds of annuities: deferred and instant.
Having a deferred annuity, your cash is invested to get a time period till you're prepared to start taking withdrawals, usually in retirement.
In the event you go for an instant annuity you start to obtain payments quickly following you make your initial investment. For instance, you may think about buying an instant annuity as you method retirement age.
The deferred annuity accumulates cash whilst the instant annuity pays out. Deferred annuities may also be converted into instant annuities when the owner desires to begin collecting payments.
Inside these two categories, annuities may also be either fixed or variable based on whether or not the payout is really a fixed sum, tied towards the overall performance from the general marketplace or group of investments, or perhaps a mixture from the two.