What Happens When An Annuity Company Fails?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What Happens When An Annuity Company Fails?

When an annuity company fails, it’s natural to feel anxious about your investments and retirement plans. The state guaranty associations step in to provide coverage, but it’s crucial to understand the specifics:

Coverage Limits Vary by State

State guaranty associations typically offer coverage up to $250,000 per policy, though this amount can vary by state. Knowing your state’s coverage limits is essential for understanding the protection available to you.

Delays in Payouts

One common consequence of an annuity company failure is the delay in payouts. State associations may take time to process claims and distribute funds, which can disrupt your financial planning and cause significant stress.

Lower Interest Rates

After a company failure, the interest rates on your annuities might decrease. This reduction can impact your expected returns and alter your retirement income projections.

Annuity Company Failure

Notable Recent Failures

Understanding past failures can help you gauge the risks and prepare accordingly. Some notable recent failures include:

  • American Chambers Life (2000): Entered receivership and liquidation, affecting many policyholders.
  • Bankers Life (2019): Under rehabilitation in North Carolina, impacting thousands of policies.
  • Colorado Bankers Life (2019): Also in rehabilitation, causing concerns among policyholders.
How Many Annuity Companies Have Failed

How We Can Help

At The Annuity Expert, we understand the fear and uncertainty associated with annuity company failure. With over 15 years of experience as an insurance agency, annuity broker, and retirement planner, we are well-equipped to guide you through these challenges.

The main problem is the risk of losing your hard-earned retirement savings due to an annuity company failure. This risk is not just about the loss of money; it’s about the loss of security, peace of mind, and the future you envisioned for yourself and your loved ones.

  • Fear: Worrying about financial instability can lead to sleepless nights and anxiety.
  • Frustration: Delays in payouts and lower interest rates can disrupt your plans and cause significant frustration.
  • Uncertainty: The unknowns of company failures can make you feel insecure about your financial future.

We believe in finding the best solutions at the lowest costs. Our mission is to provide you with the knowledge and tools to make informed decisions, ensuring your retirement is as secure as possible.

Annuity Company Failures

What We Recommend

Step 1: Schedule a Consultation

  • What Happens: During your initial consultation, we will review your current annuity policies and assess your risk exposure.
  • Main Benefit: You will gain a clear understanding of your current situation and the protections available to you.

Step 2: Customized Risk Assessment

  • What We Do: We will conduct a thorough risk assessment of your annuity holdings and provide personalized recommendations.
  • Main Benefit: This assessment will help you identify any vulnerabilities and explore options to enhance your financial security.

Step 3: Implementing Solutions

  • Positive Result: We will help you implement the recommended solutions, whether it involves diversifying your investments, adjusting your policies, or exploring new annuity options.
  • Main Benefit: You will achieve a more secure and stable retirement plan with minimized risk and optimized returns.

Features and Benefits

  • Expert Guidance: Benefit from our 15 years of experience and deep industry knowledge.
  • Personalized Solutions: Receive tailored advice that fits your unique financial situation.
  • Comprehensive Support: Access ongoing support and monitoring to ensure your retirement remains on track.

Addressing Common Objections

  • Concern About Costs: We offer competitive pricing to ensure you receive the best value for your investment.
  • Doubt About Effectiveness: Our track record and client testimonials demonstrate our success in securing and enhancing retirement plans.

Failing to address the risks associated with annuity company failures can lead to financial instability and stress. However, by taking proactive steps with our guidance, you can secure your retirement, enjoy peace of mind, and focus on the future with confidence.

What You Will Experience

With our support, you will experience the relief of knowing your retirement is protected, the confidence of having a solid financial plan, and the joy of looking forward to a secure and fulfilling future.

Contact us today for free advice or a free quote. Secure your retirement with The Annuity Expert and enjoy the peace of mind you deserve.

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Frequently Asked Questions

Has an annuity company ever failed?

Unfortunately, when annuity companies collapse, policyholders can face devastating losses.

What happens if an annuity company fails?

Although an unlikely outcome, a third party would first attempt to locate another insurer to take over the liabilities if your annuity provider becomes insolvent. If no other providers are available, you need not worry, as all annuities will be protected by the Financial Services Compensation Scheme (FSCS).

Has anyone lost money in an annuity?

The answer is yes; annuities can be a haven in unsteady markets and a reliable option for those retiring soon. However, under certain circumstances, they may not yield the expected results. But rest assured that if you seek an income stream during retirement, annuities offer guaranteed returns, so you don’t have to worry about volatile market conditions!

Are annuities 100% guaranteed?

Fixed-indexed annuities provide a secure haven for hard-earned cash, with 100% principal protection during market downturns. Alternatively, an income annuity gives you guaranteed payment streams over a specified period or throughout life–effectively turning your savings into retirement income.

What happens to my annuity if the insurance company fails?

If an insurance company fails, the annuity policyholders are typically protected by state guaranty associations. These associations provide coverage up to a certain limit, which varies by state. In the event of a company’s failure, the guaranty association will step in to ensure that policyholders receive their annuity benefits. However, it’s important to check with your state’s specific regulations to understand the coverage limits and protections available.

Are annuities guaranteed?

Fixed and fixed-indexed annuities offer guaranteed returns, making them a more stable option. However, variable annuities do not guarantee returns, and their performance is tied to the underlying investments, which can fluctuate. In the event that the issuing insurance company fails, the State Guaranty Association (SGA) provides a safety net, but coverage limits can vary by state.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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