Annuities, What Seniors Need to Know

13 Check Out the Insurance Company Usually you buy an annuity from an insurance company. Sometimes you can buy an annuity through your 401(k) retirement savings plan at work or from a mutual fund company, bank, or brokerage firm. However, an insurance company actually holds your annuity and manages your money. Is the insurance company financially sound? The independent organizations listed below rate the financial stability of insurance companies. Check these ratings before you buy an annuity. You can check them online or at your library. An “A+++” or “AAA” rating is a sign of a company’s strong financial stability. AM Best www.ambest.com Moody’s www.moodys.com Standard & Poor’s www.standardandpoors.com Weiss www.weissratings.com Is the insurance company licensed in California? Make sure the insurance company is licensed by the California Department of Insurance. You can check licenses at www.insurance.ca.gov or by calling 1-800-927-4357. If the insurance company is licensed in California, the annuity may be partially protected by the California Life & Health Insurance Guarantee Association. For more information, visit www.califega.org. Who is selling the annuity? You may buy an annuity through a bank, mutual fund company, or brokerage firm. But always ask for the name of the insurance company. The insurance company, not the bank, holds your annuity and manages your money. • The person who sells you the annuity should be a licensed life insurance agent. • If you buy a variable annuity, the person who sells it to you should also be a registered securities dealer.