What Is a State Guaranty Fund?

Hi out there in internet land. You're out there searching and googling for annuities, and you stumbled upon Stan The Annuity Man, America's annuity agent. Lucky you. You were looking for state guaranty funds. What's a state guaranty fund? Let me answer that quickly and then I will dig in and give you the sites to go see, but what is a state guaranty fund? Every Fixed Annuity on the planet is regulated at the state level, not the federal level. At the state level, they have what's called a state guaranty fund that backs annuities up to a certain dollar limit. Each state is different, but that's, in essence, what a state guaranty fund is. Hang in there because we're going to dig deeper, and I'm going to give you the sites to go to and where to find them.

‌Annuity Types

‌Okay, let's talk about the state guaranty fund. So, you're looking at Fixed Annuities, and a Fixed Annuity comes in all different types, and other people are out there going, "I hate all annuities." Yeah, right, like, "I hate all restaurants." That's crazy. Let's talk about Fixed Annuities, Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, Multi-Year Guarantee Annuities, and Indexed Annuities at the bad chicken dinner seminar. All of those are Fixed Annuities. All of those are regulated at the state level. All of those fall under that state guaranty fund, which is what you're inquiring about.

‌NOLHGA

‌Let me give you the website to go to so you can pull it up and look for yourself. Here it is. Are you ready? The website is www.NOLHGA.com. Now, you're going to go to that. You're going to see this really neat thing. It's going to say, "National Association State Guaranty Fund," blah, blah, blah. To the right of that, you're going to see pull your state up that you live in to have your residency in, and then it will take you to your state website that has the guaranty fund, and then there'll be frequently asked questions. They'll put FAQs up at the top. Click that, and then there'll be many questions, and you'll find the coverage limitations. Now, state guaranty fund coverage for annuities is per company per owner, but that'll be explained in the frequently asked questions.  

‌Client Example

‌A couple of weeks ago, I had a person that was really concerned about the annuities that he purchased and didn't buy from Stan The Annuity Man. Can you even believe that even happens? It shouldn't happen in a perfect world, but it did, and he was worried about his annuities.

‌"Are the companies going to be there?" Well, I looked at him, and he was okay because he had purchased three different annuities with three different companies, the same type, but three different companies, three different contractual guarantees, and he purchased them. He didn't know this at the time, and maybe his agent did, which is good. He purchased them all underneath that state guaranty fund limit. So, he was covered with all because it was per owner per company. All three were covered up to that state guaranty fund limit, which is good.

‌Income Rider

‌By the way, side note. This is when the alarm goes off. A lot of people out there are buying what's called Income Riders. I know I'm getting in the weeds here but hang in there with me because this is very, very important. So, you go to the bad chicken dinner seminar, and you eat the bad chicken, or if you go to the expensive steak seminar and you eat the filet mignon, and the guy sells you an Indexed Annuity with what's called an Income Rider. An Income Rider is a guarantee for future income. Sounds great, right? Grows by this fictitious percentage that makes you believe Jimmy Carter's still in office. It just grows and grows and grows by this 5, 6, and 7% interest. That's monopoly money. That calculation, and I want you to lean in right here, is not covered by the state guaranty fund. Only the accumulation value, what we call real money, the walk-away amount, is covered. Make sure you understand that when you buy your annuity. Also, make sure you are buying a company that you think can back up the Claims-Paying Ability and the contractual guarantees they're offering.  

‌Before I get to the books, you're probably saying, "Well, this is great. I learned about the state guaranty funds, but what are the annuities I want to buy? What are the ones that might fit me?" I've already done a video on that: What are the best annuity types to buy?

‌I go through each specific type of annuity, telling you where it fits and where it doesn't fit. That way, after you get my books and the quotes, you can make an informed decision.  

‌There's not a lot to say about state guaranty funds. I'm not just going to keep going over and over and over and repeating, repeating, repeating, right? Remember NOLHGA, that's the big one. That's where you go to find out what the coverage is for your state, where you live, and then remember that the accumulation value is covered, not the Income Rider value that's covered with an annuitized product, like an Immediate Annuity, QLAC or Deferred Income Annuity. That annuitization amount and that income stream guarantee amount are covered as well.

‌So, here we go. Here's the end. Here's the dramatic conclusion to what a state guaranty fund is, and I'm going to close it with this. Number one, I'm America's annuity agent, just to remind you. Number two, you can download all my books for free. My six owner's manuals will explain all of the strategies. If you want to get even more in-depth, go to The Annuity Man, which has articles and all my YouTube videos and podcasts. You can get all the information and quotes, and if you want to buy one, you can also buy one there. Thank you for joining me today; I'll see you next time.

Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.