Call your local annuity specialists at 732-365-0078
Annuities are sold by insurance companies because they offer guarantees.
Insurance companies are regulated at the state level by each state they do business in. The National Association of Insurance Commissioners (NAIC) exists to coordinate activity among the state insurance commissions and promote consistency in regulation.
It’s because of this regulation that the guarantees offered by insurance companies are meaningful. In order for a product to be called an annuity and offer a guarantee, it needs to have been approved by the state and comply with all of the regulations that exist to protect consumers.
Fixed annuities, a.k.a. multi-year guaranteed annuities or MYGAs are offered by insurance companies. Because of their shorter guarantee length of 3-10 years, you will see insurers with a wider range of financial ratings. At AnnuityRatesNJ.com, we limit our offering to those rated A-or better by A.M. Best. Here are some examples of insurance companies offering fixed annuities:
Refer to the information above for the full list of insurance companies on the AnnuityRatesNJ.com platform that offer fixed annuities. Note that this list is not exhaustive and that there are some insurance companies offering annuities that we don’t have access to such as Northwestern Mutual who only sells through their agents.
If you view fixed annuity rates, you’ll see multiple insurers bidding on your business. Their bids differ in two key dimensions: (1) the rate or quote, and (2) the financial rating. All reputable annuity providers are rated by A.M. Best. Some might also be rated by Standard & Poor's, Moody's, and Fitch. The highest A.M. Best rating is A++, then A+, A, A-, B++, B+, B etc. We limit our fixed annuity offerings to insurers rated A- or higher. Typically, the stronger the financial strength of the insurer, the return rate they’re able to offer.
The principle of diversification that you most likely use for your stock market investments also applies to annuities. Instead of choosing just one insurer and one credit rating, consider spreading your investment across multiple insurers.