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Most people see annuities as a haven for their money. The guarantee of a monthly income lends a feeling of security during retirement.
But what if the insurance company holding your annuity fails? What happens to your nest egg? Although not a common occurrence among life insurance companies, insurance insolvency can happen.
Is There a Federal Safety Net for Annuities?
The federal government provides $250,000 insurance through the Federal Deposit Insurance Corporation (FDIC) for banks. But, unfortunately, if the company holding your annuity goes insolvent, your principal or future payments aren’t guaranteed by the federal government.
Anne Johnson was a commercial property and casualty insurance agent for nine years. She was also licensed in health and life insurance. She went on to own an advertising agency, where she worked with businesses. She has been writing about personal finance for 10 years.
