Annuities are not insured by any outside source. They are guaranteed by the claims paying ability of the Insurance Company that issues the Annuity.
The best way evaluate the claims paying ability of an insurance company is by their financial ratings. Independent companies rate the insurer to provide a grade that indicated their ability to meet their obligations. Generally speaking a A or better is considered stable.
Also, insurers are required by law to invest an appropriate amount of premiums into US Treasuries (mostly US Treasuries), so that they can meet their obligations to policy holders. Since US Treasuries are considered the safest investment on the market, Annuities are considered one of the safest investments on the market as well.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Annuities are backed by the full faith and credit of the issuing life insurance company. These companies are subject to state regulations. The commissioner in your state works to make sure that every annuitant receives every penny that was guaranteed by the annuity. Annuities can have different types of investment portfolios until the time that they start paying a lifetime income. At that point it is the full faith and credit of the company and they will direct the investments subject to law.
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The best way evaluate the claims paying ability of an insurance company is by their financial ratings. Independent companies rate the insurer to provide a grade that indicated their ability to meet their obligations. Generally speaking a A or better is considered stable.
Also, insurers are required by law to invest an appropriate amount of premiums into US Treasuries (mostly US Treasuries), so that they can meet their obligations to policy holders. Since US Treasuries are considered the safest investment on the market, Annuities are considered one of the safest investments on the market as well.