Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
An annuity is a contract between you, and the insurance company. The performance of the promise is dependent upon the insurance company's ability to meet its financial obligations. That ability is supervised by the insurance commissioner in the state where the company is domiciled and the commissioner in the state in which the policy is written. There are mechanisms in place to minimize any risk to the annuitant.
That is a great question! I'm not sure what annuity you have, or the details of it, so that's a tough question to answer. If your cash flow is good enough that you do not need to touch the annuity for the length of the surrender period, then it is safe. If it pays you an interest rate that is higher than the inflation rate, then it's safe. If it is with a reliable company that can afford to pay you out, then it's safe. If you answered negatively to any of those things, then you may have trouble. If you'd like to contact me with specifics, I can answer you a little better. Thanks for asking!
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
An annuity is a contract between you (the annuitant) and the insurance company). Fixed annuities are a type of annuity that has a defined, guaranteed payment structure. The annuitant agrees to pay the insurance company a single payment, or a series of payments, and the insurance company agrees to pay you a fixed amount (income), starting immediately (an immediate annuity) or at a later date (a deferred annuity), for a specified time period (this could be for 10 years, 15, years, 20 years, for life, etc.).
You generally want to have the annuity through a financially sound company (e.g. "A" rated or higher by rating companies such as A.M. Best, Moody's, etc.). If you're concerned about what would happen to your money if the annuity insurer went bankrupt, please be aware there are protections in place in case something like that happened. In each state, insurance companies are required to pay into a state-operated guaranty fund that, in short, acts like an insurance company for the insurance company. It can pay out funds to the beneficiaries of the annuities up to the funds specified maximum allowances.
I hope the information is helpful - please feel free to contact me for help and if you have any other questions. Thanks very much.
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You generally want to have the annuity through a financially sound company (e.g. "A" rated or higher by rating companies such as A.M. Best, Moody's, etc.). If you're concerned about what would happen to your money if the annuity insurer went bankrupt, please be aware there are protections in place in case something like that happened. In each state, insurance companies are required to pay into a state-operated guaranty fund that, in short, acts like an insurance company for the insurance company. It can pay out funds to the beneficiaries of the annuities up to the funds specified maximum allowances.
I hope the information is helpful - please feel free to contact me for help and if you have any other questions. Thanks very much.