Are Fixed Indexed Annuities FDIC Insured?
No, Fixed Indexed Annuities (FIAs) are not insured by the Federal Deposit Insurance Corporation (FDIC). The FDIC primarily provides insurance for deposit accounts in banks, such as savings accounts, checking accounts, and certificates of deposit (CDs).
Who Insures Fixed Indexed Annuities?
- Insurance Companies: FIAs are insurance products and are backed by the financial strength and claims-paying ability of the issuing insurance company.
- State Guaranty Associations (SGA): In the event of an insurance company failure, State Guaranty Associations provide a safety net for policyholders. Each state has its own limits on the coverage amount.
Why Aren’t FIAs FDIC Insured?
- Nature of the Product: FIAs are annuity contracts offered by insurance companies, not deposit products offered by banks.
- Regulatory Jurisdiction: Insurance products are regulated by state insurance departments, whereas the FDIC is a federal agency overseeing banking institutions.
- Company’s Financial Health: The safety of your FIA depends on the issuing insurance company’s financial stability.
- State Limits: SGA coverage varies by state, and there are limits to the amount of protection offered.
Fixed Indexed Annuities are not FDIC insured but are protected by the issuing insurance companies and the State Guaranty Associations. It’s crucial to understand the nature of this insurance and the risk factors involved. Contact us today for a free quote.
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