A variable annuity is designed to take advantage of the investment opportunities found in the stock market. Like other deferred annuities, variable annuities enable you to accumulate money tax-deferred in order to provide an income for you at a later date. Variable annuities offer the choice of several investment divisions such as stocks, bonds, and money market funds, which can cause the rate of return to fluctuate with market conditions. The amount of money that the insurance company will pay you once you annuitize depends on which investments you selected and how they performed during the accumulation period.