Annuities are secured by the financial strength of the Insurance Company that issued them. So when considering an annuity it is very important to look at the financial ratings of the company your considering.
But, Insurance Companies are required to invest enough of their money into safe stable investments (mostly US Treasuries & AAA Bonds), so that they are able to cover any guarantees they have promised in an Insurance Contract. This gives an Annuity an incredible amount of security.
Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Tax deferred annuity products have contractual imperatives backed by the financial strength and claims paying ability of the issuing company. Most carriers maintain a dominant portfolio of investment grade government bonds. Many consumers turn to watchdog rating services, like S&P, that monitor insurance companies for changes, both positive and negative.
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But, Insurance Companies are required to invest enough of their money into safe stable investments (mostly US Treasuries & AAA Bonds), so that they are able to cover any guarantees they have promised in an Insurance Contract. This gives an Annuity an incredible amount of security.