4 Types of Annuities Explained Simply Many people have heard of annuities, but may not know much about what they are. This article will explain four different types of annuities, which include an indexed annuity. Annuities are designed to provide people with a steady monthly income for the rest of their lives. In other words, these are the opposite of a lottery ticket. You pay your money in and, ideally, you’ll get income for life with no risk of running out of cash. Annuities are basically financial products that enable people to make monthly payments for a specific period of time in exchange for a certain sum of money, plus the earnings from it. Most individuals think of annuities when they hear about guaranteed returns on investment because the majority of the options available through an annuity will guarantee a payout over time. Annuities offer a guaranteed payout, which is higher than what most stocks and bonds can offer, but the risk of depreciation makes them less attractive to...