Different insurance companies offer different types of annuities. Some investors prefer to invest in fixed annuities, some prefer variable annuities and some choose to invest in an annuity index. As with all types of investments, there are some risks associated with investing in different types of annuities. The more risk you take on, the more your annuity account will grow providing the market is favorable and your annuity investments are doing good. But, a lot of people invest in annuities because they want to invest in something safer than stocks or mutual funds, hope to benefit from tax deferrals and like many of the guarantees that the insurance companies throw in.

The income you will receive from your annuity can be in one lump sum payment, monthly payments, quarterly payments or yearly payments. You will have a say in how large each payment will be or how long you want to receive payments for. Some people choose to receive payments for life whereas others may want large payments for over less time. While payments are guaranteed to a certain extent, there are a lot of expenses you will have to pay to the insurance company in exchange for the guarantees offer. This is the reason why many people say annuities are expensive investments.