Safety Published: 2026-10-03

Are Fixed Annuities Safe? What Protects Your Money (2026)

Written by Hans Goldstein, independent licensed insurance producer · CA license 4273294 · NPN 20602398
Published October 3, 2026

Short answer: a fixed annuity or MYGA is one of the lower-risk places to hold retirement money, but it is not FDIC insured. Your principal and rate are guaranteed by the issuing insurance company, backed by its claims-paying ability, its required reserves and state insurance regulation. If an insurer fails, your state’s life and health guaranty association steps in, usually up to $250,000 of annuity value per person per company. California covers 80% of the value up to $250,000. Stay under your state’s limit with each carrier and the remaining risk is small.

Are annuities FDIC insured?

No. The FDIC lists annuities among the products it does not insure, even when you buy one at a bank branch (FDIC list of products not insured). A bank CD is a deposit. An annuity is an insurance contract, so the protection comes from the insurance system, which is built differently. Full answer, with every state’s limit: are annuities FDIC insured?

Three layers protect a fixed annuity

The insurer’s own balance sheet. Your premium goes into the company’s general account, mostly investment-grade bonds. State law requires the insurer to hold reserves against every contract it writes, plus capital on top.
State regulation. Each state insurance department audits insurers, sets reserve and capital rules and can take over a weak company before it runs out of money. In practice, failing insurers are usually placed in rehabilitation and their blocks of annuities are sold or transferred to a healthy company, with contracts kept in force.
The state guaranty association. If an insurer is liquidated, the guaranty association in your state of residence continues your contract or pays claims up to a limit. Associations are funded by assessments on the other insurers licensed in the state after a failure (NOLHGA coordinates them nationally).

Rate alert

Rates expire like milk.

The best MYGA, CD and savings rates change every few weeks. Get a short email when a rate on this page changes.

We’ll email you when a rate on this page changes. Hans Goldstein · NPN 20602398.

Rather talk it through? Or book 15 minutes on Hans’s calendar.

Guaranty association limits for annuities

Limits are set by each state’s law and apply per person, per failed insurer. A few common cases:

State	Annuity limit (present value)	What $300,000 at one insurer gets
Most states	$250,000	$250,000 covered, $50,000 not
California (CLHIGA)	80% of value, up to $250,000	$240,000 covered (80%), $60,000 not
New York	$500,000	Fully covered

California figures are from the CLHIGA FAQ as checked on HG’s California guaranty page (September 25, 2026). Every state’s limit, verified against NOLHGA and state sources, is in are annuities FDIC insured? Limits in all 50 states. Always confirm with your own state association before relying on a limit.

Coverage checker: how much of my annuity is protected?

Amount at one insurer ($)

Your state

Other limit ($)

Education only. Limits are per person, per insolvent insurer, set by the law of your state of residence, and can change. Confirm with your state guaranty association.

Can you lose money in a fixed annuity?

Not from the market. A MYGA credits a fixed rate for the term, and a fixed indexed annuity has a 0% floor in down years. The ways people actually lose money are contract terms, not market drops:

Leaving early. Surrender charges, and on many MYGAs a market value adjustment, apply if you take more than the free withdrawal amount before the term ends. See how much you can withdraw without penalty.
Taxes and the IRS penalty. Gains withdrawn before 59½ usually owe a 10% additional tax. See the early withdrawal penalty calculator.
Insurer failure above the guaranty limit. Rare, and avoidable by staying under the limit per company.
Inflation. A locked rate is locked in both directions.

Has a fixed annuity insurer ever failed?

Yes, a few times, which is why the guaranty system exists. The best-known case is Executive Life, seized by California regulators in 1991 after heavy junk-bond losses. I wrote up what happened to its annuity owners in Executive Life 1991: lessons for today’s buyer, and what the process looks like now in what happens if my annuity carrier fails.

How I keep a client’s fixed annuity money safe

My default is a MYGA from a highly rated insurer, sized to stay inside the client’s state guaranty limit at each company. A $600,000 California buyer, for example, might split across three insurers at $200,000 each, so each piece is covered to $160,000 under the 80% rule instead of one $600,000 contract covered only to $250,000. I check the AM Best rating, the renewal-rate history and the surrender terms before the rate. For a direct comparison with bank deposits, see is a MYGA safer than a CD.

Want a second opinion on your numbers?

Straight answer, no pressure.

Send your details and I’ll reply with current guaranteed rates from highly rated insurers for your amount and term, and a plain-English read on your situation. If what you have is already the right fit, I’ll say so.

Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.

Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple carriers

We’ll email it to you. Hans replies within one business day. Privacy Policy.

Frequently Asked Questions

Are fixed annuities FDIC insured?

No. The FDIC does not insure annuities, even ones sold at a bank. A fixed annuity is backed by the issuing insurer's claims-paying ability, state reserve rules and, if the insurer fails, your state's life and health guaranty association.

How much of my annuity is protected if the insurance company fails?

Most states cover up to $250,000 of annuity present value per person per insolvent insurer. California covers 80% of the value up to $250,000, and New York covers up to $500,000. Confirm the current limit with your state guaranty association.

Can I lose money in a fixed annuity?

Not from market declines. A MYGA credits a fixed rate and a fixed indexed annuity has a 0% floor. Losses come from surrender charges or a market value adjustment if you leave early, the 10% IRS penalty on gains before 59 and a half, or an insurer failure above the guaranty limit.

Is a fixed annuity safer than a CD?

A CD is FDIC insured up to $250,000 per depositor per bank, backed by the federal government. A fixed annuity is backed by the insurer and state guaranty associations. Both are low risk when you stay inside the limits; the CD's backstop is stronger, the MYGA usually pays a higher locked rate.

Sources

Goldstein & Co. LLC dba Goldstein Insurance Services, CA lic. #4273294 · Hans Goldstein, NPN 20602398 · 213-414-2808 · hans@hansgoldstein.com

This page is general education. It is not tax, legal or investment advice and is not an offer or recommendation for any specific product. Calculator results are estimates from the stated assumptions, not quotes. Guarantees in a fixed annuity are contractual and are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are not FDIC insured. Annuities have surrender charges and other limitations; read the contract and disclosure before you buy. Consult a tax professional or attorney about your situation.