I believe an annuity is simply a contract with an insurance company. You loan them your money and they provide you with a variable or fixed interest or a set period of time. I've been told they have high fees, and (as you notice) a number of constraints.
To all: Is the above correct? I don't have an annuity, but would like to know if my belief is accurate.
You do not loan them money. Once you sign the contract,
"your money" belongs to them; it is no longer
"your money." Early liquidation of that contract is then subject to the terms and conditions of that contract.
An annuity is not like owning equity. With an annuity, all you
"own" is the terms of the contract. If you don't understand the terms of that contract, continued
"ownership" is a dubious proposition, at best.
If you want to loan someone money, buy a bond. Those are a whole lot easier to understand.