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Are Fixed-Indexed Annuities Safe?

The simple answer to the question presented above is, "Yes!" Both principal, annuity rates, and credited interest are protected from index declines, so the worst thing that could happen is the stock market drops for years, and you still get back your principal plus a little interest. If you took advantage of a deferred annuity, then you can allow the investment to grow tax deferred. The fixed index annuity is as safe as the insurance company issuing it. States and independent rating firms examine financial books of insurance companies on a regular basis. They make sure that there is enough money to cover everything, which is why you rarely hear of an insurance company going bust. If a company did go out of business, other insurance companies would assist with the fixed index annuity contracts of the troubled company. Also, every state has a guarantee fund to dip into and protect annuity contract owners, within certain limits.

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