David RacichPRO
    Fountain Hills, Arizona
    Annuities are only as safe as the company issuing the contract. While indexed annuities don’t debit the account values in negative performing years, the do have policy expenses that in a non-crediting year could generate a negative return. But many (not all) indexed annuities have guaranteed provisions that protect against loss if you hold the policy for the contractual period. Before purchasing the policy always determine what the guaranteed provisions are in the contract.
    Answered on June 22, 2013
  2. 210 POINTS
    Barry Goldwater
    Principal, Goldwater Financial Group, Boston
    I agree. The annuity is only as safe as the issuing company but there are guarantees built into the contract and the company. In our industry, we keep hearing that there has never been an annuity written that did not get paid. So safety then begs the question; if my company goes into receivership, how much of my annuity will get paid out and what can I lose? That is a very good question for the broker you are working with because company safety is closely monitored by state regulators. When any company gets into financial balance sheet troubles, it is taken over by the state to ensure that policyholders will not lose their contracts to poor management or economic circuimstance.
    Answered on June 22, 2013
  3. 37376 POINTS
    David G. Pipes, CLU®, RICP®PRO
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    An indexed annuity is issued by an insurance company. The annuity isn’t a direct investment in securities, rather the company uses indexes from the stock market to set the rate of interest that it will pay the owner of the annuity. The safety of an annuity is a concern of your state insurance commissioner and the insurance commissioner of the state where the insurance company is domiciled.
    Answered on August 25, 2014
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