Variable annuities allow the owner to invest their annuity premium in any way they see fit. The insurance company does not share in profits of investments or protect losses. They carry the same risks as individual stocks, bonds or mutual funds. If the securities the Annuity is based on go up 20% for example, you keep all gains, if the investments decline 20% you must take the loss. Variable annuities afford flexibility, allowing investors to invest simultaneously across a wide array of securities: bonds, mutual funds, stocks, futures, etc. They are designed for more aggressive investors who desire investment flexibility.