There are two types of annuities - variable and fixed. The variable annuities, as their name suggests, have differential payment amounts, depending on the state of the market at that point of time. These annuities are risky, but they allow the investor to have better investment options. The fixed annuities will pay out a fixed amount over time. In some cases, the amount of payments will increase in a fixed amount with each payout. These are also known as fixed annuities.