With all the problems with the financial institutions can it affect annuities?

Question

With all the problems with the financial institutions can it affect annuities? More specifically if the annuity is issued through an insurance company?

Answer 1

Likely it's not going to affect annuities.  Additionally, if you bought one through an insurance company licensed to do business in your state (most likely), if they go under, you're protected by your state insurance department.  They will both transfer the product to another insurer, AND, they have a state insolvency fund, to pay for claims put against insolvent insurance companies.

Answer 2

Insurance companies tend to invest with a longer time horizon than banks, so this isn't a major concern for the foreseeable future.  If an insurance company does default on its contracts, they are still insured by the state guarantee association where it was sold.  Each states limits could be a little different, but in NC, it's $300k.  I have serviced clients whose policies where run by the guarantee assoc without problems.

Answer 3

Only if the insurance company gets into financial trouble.