A variable annuity like a fixed annuity allows the owner to accumulate money on a tax deferred basis. Both types of annuities allow the owner to select a lifetime income to settle the contract. There are variations of that privilege but that is the basic benefit. The accumulation of money for the fixed annuity is guaranteed by the insurance company issuing the policy. The accumulation of money for the variable annuity allows the owner to select from a group of accounts, some of which are tied to publicly traded securities. The insurance company does not guarantee those securities that are tied to publicly traded securities.