An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. You buy an annuity either with a single payment or a series of payments called premiums. Some annuity contracts provide a way to save for retirement. Others can turn your savings into a stream of retirement income. Still others do both. If you use an annuity as a savings vehicle and the insurance company delays your pay-out to the future, you have a deferred annuity. If you use the annuity to create a source of retirement income and your payments start right away, you have an immediate annuity.

Fixed Indexed annuities offer a minimum guaranteed interest rate combined with an interest rate linked to a financial index. Many indexed annuities are based on broad, well-known indices; but some use other indexes, offering more potential return and in many cases; very large returns without the high risk of the stock market. Some indexed annuities allow investors to select one or more indexes. The fixed nature of this product means that you can never lose any of your money no matter what happens in the markets or the economy.