Are Annuities Safe?
Annuities are often misunderstood. Here's a clear, honest look at the safety of annuities and how they're protected in West Virginia.
How Annuities Are Backed
Annuities are contracts issued by insurance companies, not banks. They are not FDIC-insured. Instead, they are backed by the financial strength and claims-paying ability of the issuing insurance company. This is why it's important to choose annuities from highly-rated insurance carriers.
State Guaranty Associations
Every state, including West Virginia, has a Life and Health Insurance Guaranty Association that protects policyholders if an insurance company becomes insolvent. In West Virginia, the guaranty association covers up to $250,000 in annuity benefits per person per insurer. This is similar to FDIC protection for bank accounts.
Fixed Annuity Safety
Fixed annuities are among the safest financial products available. Your principal is guaranteed, your interest rate is locked in, and you cannot lose money due to market fluctuations. The main risk is the financial strength of the issuing insurer — which is why AG Insurance only works with highly-rated carriers.
Indexed Annuity Safety
Indexed annuities also protect your principal from market losses. Even if the stock market drops significantly, your account value cannot go below your protected principal. You may earn 0% in a down year, but you won't lose money.
Common Concerns About Annuities
The most common legitimate concerns about annuities are surrender charges (penalties for early withdrawal, typically for 5–10 years), complexity (some products are difficult to understand), and fees (variable annuities can have high fees — fixed and indexed annuities typically have lower costs). AG Insurance can help you understand any annuity before you purchase it.
Talk to an Annuity Specialist Today
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