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Annuity types
Annuity types compared: MYGA, FIA, SPIA, and DIA
Four kinds of fixed annuities, what each one is for, and how to pick.
Short answer: choose a MYGA for a guaranteed rate like a CD, a fixed indexed annuity for growth potential with no market losses, a SPIA for income that starts now, and a DIA for income that starts later. All four protect your principal from market losses.
Side by side
| MYGA | FIA | SPIA | DIA | |
|---|---|---|---|---|
| Main job | Guaranteed growth | Protected growth, optional income | Income now | Income later |
| Interest | Fixed rate | Index-linked, cap and floor | Built into payout | Built into payout |
| Income starts | When you choose | When you choose | Within 12 months | 1–40 years later |
| Access to principal | Free withdrawals, then charges | Free withdrawals, then charges | Generally none | Generally none |
| Good for | CD alternative | Pre-retirees | New retirees | Longevity planning |
MYGA (multi-year guaranteed annuity)
- Locks a rate for a set term, commonly 3, 5, or 7 years
- Interest grows tax-deferred
- At the end: renew, roll to another annuity, withdraw, or turn into income
Fixed indexed annuity (FIA)
- Interest based on an index, limited by a cap or participation rate
- 0% floor protects against index losses
- Often paired with a lifetime income rider
- Surrender periods are often longer than MYGAs
SPIA (single premium immediate annuity)
- Trade a lump sum for guaranteed income, starting within a year
- Options: for life, for life with a period certain, or joint for two lives
- Highest income per dollar, but limited access to the lump sum
DIA (deferred income annuity)
- Buy now, income starts at a chosen future date
- The longer you wait, the larger the income
- Useful for covering expenses in your 80s and beyond
Agent tip: Many retirees combine types: a MYGA for near-term savings, an FIA for growth, and a SPIA or income rider to cover basic bills.
Annuity Types: common questions
Which annuity pays the most income?
For income starting now, a SPIA usually pays the most per dollar. For income starting later, a DIA or an FIA with an income rider can pay more because the money has time to grow.
Which annuity is most like a CD?
A MYGA. It pays a guaranteed rate for a set term, with tax deferral.
Do you offer variable annuities?
No. Variable annuities require a securities license. We focus on fixed, fixed indexed, and income annuities.
Sources and further reading
- National Association of Insurance Commissioners (NAIC): consumer guides to life insurance and annuities
- Virginia State Corporation Commission, Bureau of Insurance: verify an agent's license
- AM Best: insurer financial strength ratings
- IRS: tax rules for life insurance and annuities
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