The biggest risk when purchasing annuities might be the insurance company that issued the investment going out of business. According to Insurance News Net’s posting by Zaeem Shoaib, the “Ohio General Assembly Raises Annuity Guaranty Coverage to $250,000.” The previous protection in Ohio was $100,000, so this is a 150% increase in investors’ security. The Ohio General Assembly amended the state’s insurance law which goes into effect on May 26.
The Ohio Life and Health Insurance Guaranty Association will cover the $250,000. They are a nonprofit organization made up of insurance companies selling annuities, life insurance, and health insurance in Ohio. When you compare annuities with investments that offer FDIC insurance, some investors would choose not to go with annuities. Now that Ohio has a $250,000 guaranty for annuity investors whose insurance company becomes insolvent, those investors have more incentive to reap all of the benefits an annuity has to offer.