It's feasible you can shed your cash when the insurance coverage business you invested with goes belly up. Whenever you buy a deferred annuity you're providing an insurance coverage business cash these days, and also you might not obtain your payments to get a quantity of years (the earliest you are able to make withdrawals from an annuity with out incurring a 10% penalty is age 59 ?). So it's crucial to buy annuities only from insurance coverage businesses that you are confident will probably be in company whenever you retire.
Verify the insurer's credit rating, a grade offered by credit bureaus like A.M. Very best, Regular & Poor's and Moody's that expresses the company's financial health. Each rating firm has its own grading scale. As a general rule, limit your options to insurers that obtain either an A from A.M. Very best or AA- or better from Moody's and S&P. You are able to find the ratings online, or get them from your insurance coverage agent.
There are state guaranty funds that protect annuity owners if an insurance coverage business fails, but the coverage is limited and varies from state to state.