Variable- In this option, the insurance company gives the choice of parking your investments as per your wish; therefore, the returns totally depend on the market sell structured settlement conditions and the performance of the funds. Premium earned will be taxed on an ordinary basis and helps in spreading the payment over the investment term. As a result, you may stand to gain or lose in the process for the investment may grow faster than a fixed one.3. The annuities are invested to help payments in the future. Fixed – In a fixed annuity, the rate of interest is set and is guaranteed by the insurance company, who in turn choose the high-grade bonds for investment. Fixed index annuity- This option is a mix of the best of both fixed and variable annuities. There are two types of taxations on annuities;1. Out of the three aforementioned options, the fixed annuities pay you a guaranteed amount for a term or for life, whereas the other two options are dependant on the performance of the stock in the market, with regard to their payments. These annuities are as follows:1. If the annual index is positive, your earnings will increase, subject to a cap, but if the market is negative your earnings will be limited to the minimum earning, guaranteed by the company. By way of annuitization the different annuities can be converted into immediate amounts and you can take part payments. These deferred payments help us to invest in immediate-term annuities. In the event of an emergency, the amount can be withdrawn by paying extra fees and taxes.There are three types of annuities, the nature of which are dependant on how the funds are invested.