Printable checklist for your desk
Print this checklist and note which type you are looking at, who carries the risk, and what to ask.
Download the PDF (large print)The short version. "Annuity" is a family of contracts with the same basic idea: you give an insurance company money, and it promises something back. What it promises, and who carries the risk if markets move, differs a lot between types. The SEC lists the main deferred types in order of increasing risk: fixed, fixed indexed, registered index-linked, and variable. [1]
The main types side by side
| Type | Regulated by | Who carries market risk | What to know |
|---|---|---|---|
| Fixed (including multi-year guaranteed) | State insurance department | The insurer. You carry the insurer's ability to pay. | Guarantees a minimum credited interest rate. Early withdrawals can trigger surrender charges and, in some contracts, a market value adjustment. [1, 3] |
| Fixed indexed | State insurance department | The insurer carries market loss; your upside is limited by caps, participation rates, or spreads. | Interest is linked to a market index but you are not invested in the index. The interest rate is guaranteed never to be below zero. [1, 4] |
| Registered index-linked (RILA) | State insurance department and the SEC (sold through broker-dealers) | You, beyond a buffer or floor the insurer sets. | A buffer absorbs losses up to a set percentage. A 20% buffer with a 25% index drop leaves a 5% loss to you. It is a security. [1, 5] |
| Variable | State insurance department and the SEC | You. Value follows the funds you choose. | Sold with a prospectus. Fees can include insurance charges, administrative fees, fund expenses, and rider charges. [1, 2] |
| Immediate income (SPIA) | State insurance department | The insurer. | No accumulation phase: payments start right after you buy. Generally no cash surrender, so the money is not available later. [6, 3] |
| Deferred income or longevity | State insurance department | The insurer. | A guaranteed monthly income starting at a future date. After purchase you cannot access the amount you invested, and you receive the guarantee only if you are alive at the start date, unless you add a death benefit. [7] |
Guarantees come from the company, not the government
FINRA puts it plainly: an annuity is guaranteed only as long as the insurance company issuing it remains in business, and annuities are not guaranteed by the FDIC or other federal agencies. State guaranty associations provide a backstop up to set limits. See our annuity safety guide. [2]
Qualified longevity annuity contracts (QLACs)
A QLAC is a deferred income annuity bought with money from a retirement account, designed to push part of your required withdrawals to a later age. The rules for 2026:
- The premium limit is $210,000 for 2026. The old rule that capped a QLAC at 25% of your account balance no longer applies for contracts bought on or after December 29, 2022. [8, 9]
- Payments must begin no later than the first day of the month after your 85th birthday. [9]
- A QLAC cannot be a variable, indexed, or similar contract. That means a fixed indexed annuity or a RILA cannot be a QLAC. [9]
- It must be bought with traditional retirement account money, such as an IRA or workplace plan. Rules vary by plan. [7, 9]
Some quick ways to sort the choices
- I want guaranteed income I cannot outlive, starting soon: the immediate income category exists for this. You give up access to the money.
- I want guaranteed income later, for a long life: deferred income and longevity annuities are built for this, and the cost is also lost access.
- I want principal protection and a known rate for a set number of years: fixed and multi-year guaranteed annuities.
- I want some upside linked to an index with a floor: fixed indexed annuities, which limit both loss and gain.
- I accept market loss for more upside: variable annuities and RILAs, which are securities.
None of these is the best choice for everyone. Compare each against alternatives such as CDs, Treasury bonds, or keeping the money invested, and against your own need for access to the money.
Questions worth asking about any annuity
- What type of annuity is this, and who regulates it?
- Who carries the risk if markets fall, and who carries it if the insurer cannot pay?
- What can I take out, when, and what does it cost to take it out early?
- What does this give me that a simpler choice would not?
Frequently asked questions
What are the main types of annuities?
The SEC lists the main deferred types in order of increasing risk: fixed, fixed indexed, registered index-linked (RILA), and variable. Immediate income and deferred income (longevity) annuities are other common types.
Who regulates annuities?
Fixed and fixed indexed annuities are insurance products regulated by state insurance departments. RILAs and variable annuities are also securities registered with the SEC.
What is the 2026 QLAC premium limit?
$210,000 for 2026 under IRS Notice 2025-67. A QLAC must start payments by age 85 and cannot be a variable, indexed, or similar contract.
Sources and review notes
- SEC Investor.gov: Annuities
- FINRA: Annuities
- NAIC: Annuities (consumer overview)
- NAIC: Buyer's Guide to Fixed Deferred Annuities (revised 2013; NAIC has a rewrite in draft)
- SEC Office of the Investor Advocate: report on registered index-linked annuities (September 2023)
- SEC Investor.gov: Immediate annuity
- SEC Investor.gov: Longevity annuity
- IRS Notice 2025-67: 2026 QLAC premium limit
- IRS: Instructions for Form 1098-Q (QLAC rules)
About this guide. This is general education, not tax, legal, or investment advice, and it is not a recommendation to buy or not buy any product. Nazim Lokhandwala is a licensed insurance professional who offers fixed and indexed annuity products. He does not offer variable annuities or registered index-linked annuities. This guide covers every type so you can compare, and an annuity is not the right choice for everyone. Annuity guarantees depend on the claims-paying ability of the issuing insurer. Product features, rates, and rules vary by company and by state, so read your contract and ask the seller to explain anything that is unclear.