Encore: Buying an Annuity? Kick the Tires
Immediate annuities promise that your money will be there when you need it. But many investors are questioning how good those guarantees really are.</br></br>The reality is that insurance companies offering annuities can, and have, failed. But policyholders can take comfort from a well-established, industry-financed safety net. Although investments aren't always covered in full, history suggests these annuities are about as safe an investment as you can get without the full backing of the U.S. government.</br></br>That said, there's no reason to court trouble. The current environment shows why -- even in good times -- investors should seek out the strongest companies in the marketplace.</br></br>A recent Encore column discussed the ins and outs of immediate annuities. These insurance products convert your cash into income that can be guaranteed to last the rest of your life.</br></br>Many readers wondered, however, about the safety of insurance companies. And it's no wonder. The near collapse of AIG -- American International Group -- and concerns about other big-name insurers such as Hartford Financial Services and Lincoln National have made headlines.