No. of Recommendations: 3
Yes, that lack of a real guarantee is a problem. There is an interesting discussion of the issue here:

During the same period customers of 42 life & health carriers received cash from state guarantee funds. Every state guaranty fund covers up to $100,000 of cash value in the event of carrier insolvency, but here’s the real deal. I have been digging though the records of insurance company failures for over eighteen months. Based on my research every annuity holder in a failed company during this period received up to $100,000 of the annuity value. In fact, during this period there was only one failed carrier that did not provide all of the annuity value – even for account balances in excess of $100,000 – for all of their annuity customers; owners of annuities issued by National American Life Insurance Company of PA did receive up to $100,000 but account amounts above $100,000 may never be fully paid.

In any case, if I did want to buy an annuity (but I do not), I would not want to put more than $100,000 into any single annuity, for reasons given above.
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