Safety

No. A life insurance company cannot declare bankruptcy. If they fall below the dollar-for-dollar legal reserve requirement, they go under supervision and if the delinquency is not resolved in a timely manner, they may go into receivership with the state. The state will transfer your policy to another carrier and all guaranteed elements of your policy remain intact.

Your principal payment is not protected when you purchase a variable annuity, as you are making a commitment to invest in the market for potentially stronger performance. The flip side of this is that you could also experience losses as a result of market performance. Your principal payment is protected when you purchase a fixed or indexed deferred annuity. Be aware, however, that some annuities offer additional benefits, or riders, which you may choose to purchase to ensure additional protection and growth. In some cases, these rider purchases could chip away or deplete the principal payment of the annuity, in the event that the non-guaranteed credited interest is insufficient to cover the costs. Be sure to ask your financial advisor or insurance professional to explain.

When an insurance company goes through bankruptcy, the insurance coverage will continue, and annuity accounts will be covered and paid by state insurance guaranty associations, subject to each state's coverage limits. Guaranteed coverage amounts typically vary from $250,000 to $500,000 in benefits.","example":"\Example: \u003cstrong\u003eFor the state of New York: the total protection per owner per member company is $500,000 for all annuity contracts (many other states' limits are $250,000). As a result, if an individual owned three $250,000 annuities with the same insolvent insurance company, the individual would have the total New York Guaranty Corporation coverage of only $500,000. If an individual owned three $100,000 annuities with the same insolvent insurance company, all $300,000 contract value is fully covered. For State of Nebraska:the total protection per owner per member company is $250,000 for all annuity contract.","reminder":"\Reminder: Please check with your state's insurance guaranty association to see what amounts are covered for your annuity.

Highly rated annuity companies can be among the strongest financial institutions in the world. They operate under a dollar-for-dollar legal reserve system which ensures they have financial reserves backing more than 100% of their liabilities. Additionally, they are audited independently by every state in which they operate, providing oversight of their financial stability. Moreover, annuity companies must invest the majority of their assets in US Government Bonds, investment grade corporate debt, and mortgage backed securities. Only a small portion of their assets may be invested in the stock market.","reminder":"\Reminder:The insurance backing the annuity is generally safe no matter the market backdrop, as the insurance industry is highly regulated and required to hold a certain amount of reserves to meet liabilities.

It depends on the type of annuity you purchase. Fixed Indexed Annuities are safe from market losses and provide full guaranteed protection of your principal. Another type of annuities is variable annuity, which can lose value if the market goes down. The safety of any annuity contract depends on the financial strength and claims-paying ability of the issuing insurance company.","reminder":"\Reminder: A fixed index annuity is not a type of a variable annuity. Generally speaking, FIA's contract value won't fluctuate and it's not a risky investment like stocks, mutual funds, ETF's, bonds or real estate. Therefore, FIAs are not 'securities' that are regulated by the SEC (Securities Exchange Commission).

Yes it is safe, historically, industry regulators require annuity companies to save the majority of their assets in fixed income. An annuity company's financial security is \u003ca href='https://www.immediateannuities.com/insurance-company-ratings/' target='_blank'\u003erated by various ratings agencies such as A.M. Best, Standard and Poor’s, and Moody’s. These rating agencies look at the finances and obligations of insurance companies to determine their financial stability. That being said, historically, annuity companies have been risk averse entities that have performed well during times of economic hardship.","reminder":"\Reminder: It's very important to check your insurance company's ratings before you decide to purchase an annuity from them.