Safety of Insurance Companies

I cannot tell you that no one has ever lost money in a fixed annuity due to carrier failure, because they have, but consider this: From 1994 through 2008 there were 94 bank failures. During the same period a little over a dozen interstate annuity carriers received cash from state guarantee funds. Every state guaranty fund covered at least $100,000 of cash value and there were only 3 failed carrier that did not provide all of account value for all of their customers---a better record for the period that FDIC.

People are looking for safe money havens. Even though there have been bank and annuity customers who have lost money due to failure the reality is this:

1. Will a customer lose money due to bank failure with their CD? Almost certainly not if you are below the FDIC limits. (But also remember the FDIC has 99 years in which to pay you back.)
2. Will a customer lose money in their fixed annuity due to an insurer failure? As well, almost certainly not."

Source: Jack Marion in Senior Market Advisor June 2009