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Your financial situation is unique and the products and services we review may not be right for your circumstances. If you're still paying into your annuity, continue making payments while the bankruptcy is resolved by regulators. This keeps your annuity contract in force. That's important, because the best-case scenario is that a more financially stable insurer will take over your annuity. The new insurer gains a long-term client, and you'll get the retirement income you'd originally planned on.
With a variable annuity that extends only to the guaranteed minimum payment portion of the contract. For amounts greater than your state's guaranty fund will cover, you can turn to SIPC for an additional level of reimbursement. SIPC doesn't protect you from any downturn in the market while your affairs are settled. If you're still out of pocket after this, your state's guaranty association can attempt to recover further funds from the insurer's bankruptcy proceedings.
Fred Decker is a trained chef and certified food-safety trainer. He's held positions selling computers, insurance and mutual funds, and was educated at Memorial University of Newfoundland and the Northern Alberta Institute of Technology. Variable Annuities. I understand the fears that you might have about the safety of your annuity.
We're going to cover it all, and we're going to start by talking about state guarantee funds. In the fixed annuity world, fixed annuities are backed by what's called state guarantee funds. Each state has one, and they have a specific limit that they'll cover with the annuity if the company fails. Understand this, FDIC is the best coverage on the planet. That's what you get with your bank CDs, et cetera. Do not allow any agent or advisor to tell you that state guarantee funds are the same or better.
They're not. It's there, it's protection, but I will tell you this, it's never been tested. So when you buy an annuity, focus on the claims-paying ability of that carrier. So what is and is not covered when your annuity company fails? Good question. And you need to know this before going into an annuity.
Not that we're planning to fail, but you always have to understand the contract. The accumulation value of a deferred annuity is covered under those circumstances. What's not covered is those luscious Jimmy Carter yield, pie in the sky, income riders. Those are not covered when your company fails. It's the accumulation value that is covered, not the income rider.
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