Is an Annuity Guaranteed?

An annuity's "guarantee" is only as strong as the insurance company that issues the annuity. There may be state guarantees in the event of an insurance company's failure, but annuities are not guaranteed by the FDIC, SIPC or any other federal agency if the insurance company that issues the contract fails.

Can you lose your money in an annuity?

Annuity owners can lose money in a variable annuity or index-linked annuities. However, owners can not lose money in an immediate annuity, fixed annuity, fixed index annuity, deferred income annuity, long-term care annuity, or Medicaid annuity.

Are annuities risk free?

Annuities, like most financial instruments, are not without risk. Annuity payouts are based on the annuitant's life expectancy. Because we have no way of knowing how long any individual will live, buying an annuity means accepting the risk that you won't necessarily reap all the potential benefits from your purchase.