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

http://www.anabsolutebroker.com/Annuities.pdf

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.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement