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Annuity question
Old 11-27-2023, 03:50 PM   #1
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Annuity question

I am looking at an annuity from Lincoln insurance that is fixed 5.85% and 5 yr , minimum $100k (it has no fees)

I read where Lincoln has a good rating for annuities. Is there an FDIC equivalent for insurance companies for something like this, if the insurance company went under?
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Old 11-27-2023, 04:42 PM   #2
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Your annuity is guaranteed by a state insurance association, which operates differently from the way FDIC insurance works. The maximum limit varies by state and typically ranges from $100K to $250K. A list of state insurance associations is https://www.nolhga.com/policyholderi...fm/location/ga
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Old 11-27-2023, 04:47 PM   #3
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TIAA is a better company for payout phase annuities...
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Old 11-27-2023, 05:03 PM   #4
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Originally Posted by bobbyr View Post
I am looking at an annuity from Lincoln insurance that is fixed 5.85% and 5 yr , minimum $100k (it has no fees) ...
The Lincoln web site (www.lincolnfinancial.com) steers individuals to "financial professionals" aka salespeople. This indicates that sales commissions are paid. A commission is a fee and you end up paying it.

I suggest that you get a hard copy and a PDF copy of the prospectus. Search the PDF for costly words like "fee" and "charge." I did this recently with a Thrivent prospectus and found fees for putting money in, fees for taking money out, and annual fees plus some others. Be sure to read the hard copy thoroughly too.

There are annuity experts here who can help you look at this product and this company. I am not one of them but seeing "no fees" raises my eyebrows a bit.
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Old 11-27-2023, 05:19 PM   #5
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What type of annuity are you looking at? Blueprint Income is showing MYGA (multi year guaranteeed annuity) products from Lincoln Financial which is A rated but the interest rate is 4.95 for 5 or 7 years so maybe it is different from the one you are looking at.
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Old 11-27-2023, 06:43 PM   #6
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From Bard:
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Lincoln National Corporation's claims-paying ability ratings are as follows:
  • AM Best: A+ (Strong)
  • Fitch: A- (Strong)
  • Moody's: P-2
These ratings are all considered to be strong, and they indicate that Lincoln National Corporation is financially sound and has a strong ability to pay its claims.
The guarantor for annuities are various state guaranty funds and state guaranty associations that assess healthy insurers for losses on troubled insurers.
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Old 11-27-2023, 06:58 PM   #7
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What type of annuity are you looking at? Blueprint Income is showing MYGA (multi year guaranteeed annuity) products from Lincoln Financial which is A rated but the interest rate is 4.95 for 5 or 7 years so maybe it is different from the one you are looking at.
mine was at 5.85, I'll check on that, thx
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Old 11-27-2023, 06:59 PM   #8
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From Bard:


The guarantor for annuities are various state guaranty funds and state guaranty associations that assess healthy insurers for losses on troubled insurers.
stupid question, but I assume that insurance against the insurance company failing is based on the state where the company is located and not the state I live in?
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Old 11-27-2023, 07:01 PM   #9
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Your annuity is guaranteed by a state insurance association, which operates differently from the way FDIC insurance works. The maximum limit varies by state and typically ranges from $100K to $250K. A list of state insurance associations is https://www.nolhga.com/policyholderi...fm/location/ga
based on the state where the company is based?
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Old 11-27-2023, 07:16 PM   #10
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The State Guaranty Association coverage is based on the state where the annuitant lives. if you provide the exact name of the annuity product you will likely get better feedback. There are so many different types of annuities that can be good or awful depending on the situation.
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Old 11-28-2023, 12:36 AM   #11
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Is that a MYGA? Multi Year Guaranteed Annuity. Is that in lieu of, say, a bond or CD? IOW are you actually wanting the "annuity" part or just the growth vehicle. I ask, because there are different issues regarding those two functions.

I've used MYGAs (and their predecessor, the SPDA - Single Premium Differed Annuity) as savings vehicles - but never considered annuitizing them. YMMV
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Old 11-28-2023, 03:45 AM   #12
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Op, be sure that this a MYGA you are writing about. MYGA's from reputable insurance companies are truly NO FEE. Best to research these instruments from other reputable sources such as Blueprint Income and/or Stan the Annuity Man. Also, do NOT assume that the State backed state guaranty funds are same as FDIC, it is NOT. Just see articles related to annuity holders of Colorado Bankers Life. Years later, many policy holders are still trying to get their monies as this is wrapped up in legal court system. Ugh!
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Old 11-28-2023, 05:56 AM   #13
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Why not just buy a well rated bond paying the same, and not give up the principal?
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Old 11-28-2023, 07:25 AM   #14
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Why not just buy a well rated bond paying the same, and not give up the principal?
+1
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Old 11-28-2023, 07:32 AM   #15
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Why not just buy a well rated bond paying the same, and not give up the principal?
MYGAs do NOT give up principal.
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Old 11-28-2023, 07:34 AM   #16
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MYGAs do NOT give up principal.
But donít you have it locked up for the period?
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Old 11-28-2023, 07:51 AM   #17
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But don’t you have it locked up for the period?
Yes, but with 10% per year allowable free withdrawals, if you choose the right one. Any more than 10% and just like most CDs there are penalties. So not completely locked up.

DrRoy implies the principal was lost, I.E. an income style annuity. The Period Certain or Lifetime options.

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Why not just buy a well rated bond paying the same, and not give up the principal?
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Old 11-28-2023, 07:59 AM   #18
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Yes, but with 10% per year allowable free withdrawals, if you choose the right one. Any more than 10% and just like most CDs there are penalties. So not completely locked up.

DrRoy implies the principal was lost, I.E. an income style annuity. The Period Certain or Lifetime options.
I understand the ease of these products, but a well designed ladder will likely outperform these with nearly 100% liquidity.

People need to decide what is important and act accordingly.
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Old 11-28-2023, 09:20 AM   #19
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I obtained more information. It is MYGA. Interest accrues daily. We could pull up to 10% yearly if we needed to (we won't). It's money in my wife's roth BTW.
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Old 11-28-2023, 09:26 AM   #20
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But donít you have it locked up for the period?
You DONT buy a MYGA if you can leave it in for the contract. I have had 3 MYGA and use them to defer the taxes on the income.
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