How Many Annuity Companies Have Failed?

How many annuity companies have failed?

In my career, going back almost three decades, I’ve seen three annuity company failures that were on my radar screen.

I’m not talking about some tiny, low-rated company nobody should have been looking at anyway.

I’m talking about companies that actually showed up in the annuity world.

And here’s the important part.

In those cases, policyholders got their money back.

Key Takeaways

• Very few annuity company failures have occurred among companies worth paying attention to
• Three notable failures have been on my radar during my career
• State guaranty funds helped protect policyholders
• In those cases, consumers received their money back
• Carrier ratings still matter, especially for lifetime income
• For lifetime income, A+ rated carriers or better should be the standard

What Happens When an Annuity Company Fails?

Each state has a state guaranty fund.

That fund exists to protect policyholders up to certain limits.

But I do not recommend buying an annuity based on the guaranty fund.

That is not the first line of defense.

The first line of defense is the claims-paying ability of the insurance company.

That means looking at the carrier before you buy.

The Three Failures I’ve Seen

During my career, I’ve seen three annuity company failures that mattered enough to be on my radar.

All three were handled differently.

One took months to work through.

One was absorbed by another insurance company.

One involved state intervention after alleged reporting issues.

But in all three situations, policyholders got their money back.

Why Ratings Matter

For lifetime income, the rule is simple:

A+ rated or better.

No exceptions.

Why?

Because with lifetime income, you are marrying that carrier.

They are on the hook to pay you for as long as you are breathing.

That is different from a short-term MYGA where you are more like dating the carrier for three or five years.

State Guaranty Funds Are Not the Strategy

Yes, state guaranty funds exist.

Yes, they matter.

But they should not be the main reason you buy from a company.

You should buy based on:

• claims-paying ability
• ratings
• financial strength
• contractual guarantees
• administrative quality

That is the real process.

The Annuity Industry Protects Confidence

Annuities are confidence products.

People buy them because they trust the insurance company to back up the guarantee.

The industry knows that.

That is why regulators, state insurance commissioners, the NAIC, and the major carriers all have an interest in protecting consumer confidence.

What About A+ and A++ Companies?

People sometimes ask:

“What happens if an A+ or A++ company fails?”

My answer is simple.

Do not go down that rabbit hole.

If that happens, we have much bigger problems.

That is not a realistic planning basis.

Why Due Diligence Still Matters

Even though the history is strong, you still have to do your homework.

At The Annuity Man, the process starts with:

• contractual guarantees
• carrier ratings
• financial strength
• product type
• whether the company can actually back up the claim

That is especially important with lifetime income.

Where to Compare Strong Carriers

If you want to compare annuity guarantees from carriers that actually fit your situation, you can use our annuity calculators here: https://www.stantheannuityman.com/ annuity-calculator/

The Bottom Line

How many annuity companies have failed?

In my career, I’ve seen three meaningful failures on my radar.

And in those cases, policyholders got their money back.

But that does not mean you buy blindly.

You still focus on strong carriers, contractual guarantees, and proper structure.

For lifetime income, A+ rated or better.

Period.