Annuity insurance - don't exceed it.

[Brookswood]

There's an interesting article on certain people who have invested in annuities and the annuity company is in financial trouble. One couple invested $700,000 into an annuity. The annuity company has legal issues and is not paying out. The state insurance is $250,000. You can see where this is going, and it's not to a good place. At the very least this couple should have spread the 700,000 dollars over three to four annuity companies. Worse, because the annuity company is tied up in legal issues, they can't get their money out until those matters are settled by the court. It's been four years. . No income, no refund. Had they spread their money out they would still be getting income from at least two other annuity companies. Several people have died during the four year wait. How lousy is that?

Folks please be careful with whom you trust your hard earned dollars. And watch for those insurance limits. Stay comfortably under them.

 

[Disgustedman]

Good advice, sad I cannot use it.

 

[mathjak107]

insurance companies can be in a heap of trouble if the economy slides .

the BBB segment is the most popular segment in the bond market ..it is the sweet spot and the last rung of investment grade .

this segment is now 64% of the entire corporate bond market .

it has increased by 75% the last 10 years .

one slip in credit rating and all pension funds , mutual funds , banks, insurers , etc that can only hold investment grade bonds has to dump them .

S&P global ratings estimates insurers would need 4x the reserves they have if a recession knocks down credit ratings .

so if anyone thinks annuities are immune to what goes on in markets, guess again

 

[Brookswood]

one slip in credit rating and all pension funds , mutual funds , banks, insurers , etc that can only hold investment grade bonds has to dump them .

S&P global ratings estimates insurers would need 4x the reserves they have if a recession knocks down credit ratings .

so if anyone thinks annuities are immune to what goes on in markets, guess again

But, but, but....... The guy who sold me my annuity said it was much safer than the stock market and even safer than bonds. The name of my policy even has the word guaranteed in it - "Multi Year Guaranteed Annuity".

Thanks for that update.