Are good annuities generally backed dollar for dollar?

Question

The FDIC has less than 2% in reserves. I got the link on Yahoo answers. So why do CD's? Less return, less safety.

Worse tax consequences. Am I wrong?

Answer 1

Annuities are an insurance product. That is how they get their tax deferred benefit.  They are NOT FDIC insured AT ALL.

BUT insurance is regulated by the states and they do have some insurance through the states but it could be for only a percentage of the value.

My father had an annuity with a company that went bankrupt and despite another company taking it over it took 10 years for him to get his money out.

Answer 2

FYI: The FDIC does not guarantee annuities.

CD's are FDIC backed to $100,000 Any short fall would fall on the US gov (tax payer).

Variable annuities fall under SIPC.

"Variable annuities are securities regulated by the SEC. Fixed annuities are not securities and are not regulated by the SEC. Equity-indexed annuities combine features of traditional insurance products (guaranteed minimum return) and traditional securities (return linked to equity markets). Depending on the mix of features, an equity-indexed annuity may or may not be a security. The typical equity-indexed annuity is not registered with the SEC."