Fixed: A guaranteed initial interest rate
for a specific period -- usually 1, 3 or 5 years.
After that a new interest rate is determined. The
agent should be able to show you a rate history so
you can see if there's a big difference between the
initial fixed rate and the second fixed rate. These
are a lot like CDs in that your principal and interest
rate are guaranteed, but annuities don't have the
backing of the Federal Deposit Insurance Corp.
Variable: Principal and rate of return aren't
guaranteed but you stand a chance of doing better
than the going interest rate because, depending on
the insurance company, you may have the option of
investing in stocks, bonds, mutual funds and money
markets. You also stand a chance of losing your shirt.