Already Have An Annuity? Find out if its still the right one for you today...take the quiz now →
    Institute of Financial Wellness
    The Annuity FinderPowered By The Institute of Financial Wellness
    ← Back

    Annuity Basics

    Are Annuities Safe?

    Annuities are among the most regulated financial products available — but 'safe' depends on the type you choose and the company behind the contract.

    Hands cradling a small house and coins, symbolizing financial safety
    Annuity safety is a combination of carrier strength, regulation, and contract type.

    What Makes Annuities Safe?

    Annuities are issued by insurance companies and backed by their financial strength. Insurers must hold reserves and meet strict capital requirements set by state regulators. Many fixed and indexed annuities also offer principal protection, meaning you cannot lose money due to market downturns.

    Layers of Protection

    • Insurance carrier reserves — Each contract is backed by the issuing insurer.
    • State regulation — Insurers must meet capital and solvency rules.
    • State guaranty associations — Provide an additional safety net up to certain limits.
    • Contract guarantees — Many annuities lock in principal and minimum interest.

    Where Risk Still Exists

    Variable annuities can lose value because they invest in market subaccounts. And while insurance carriers rarely fail, choosing a financially strong company — typically rated A or higher by major rating agencies — adds meaningful peace of mind.

    Related reading

    ← Back