Is Your Annuity At Risk?

Lincoln Financial

Prudential Insurance

Hartford Insurance

Genworth Financial

The stocks of the nation's insurance companies have crashed over the last few months. There is growing concern that at least one major insurance company will fail this year. Owners of fixed annuities and cash value life insurance are at risk if the company fails. Most states have an annuity insurance pool that insures life insurance and annuities up to $100,000. If a major insurance company, or more than one fails, the pool will be quickly depleted. I would be very nervous if I had substantial money in fixed annuities or cash value life insurance. Variable annuities are immune from failure of the insurance company since they are held in separate accounts.

What to do now:

1. Avoid investing money in fixed annuities at this time.

2. Withdraw funds from fixed annuities if you can do so without a huge surrender fee or tax liability

3. Borrow the cash value in your life insurance policy.

Lou Scatigna