Annuities, prized for their promise of reliable income in retirement, are a cornerstone of financial security for many. But what happens when the insurance company behind your annuity fails? Though rare, annuity company failures can have wide-reaching consequences for policyholders, insurance markets, and the broader financial landscape. Immediate Impacts on Policyholders When an annuity company fails, the most immediate concern for policyholders is the potential loss of income. Annuities, often purchased to provide a steady stream of income in retirement, are designed with long-term payouts in mind. However, in the event of a company collapse, policyholders may find themselves facing uncertainty and disruption to these payments. For example, during the collapse of Executive Life Insurance in the early 1990s, annuity holders experienced considerable uncertainty over when or if they would receive their payouts. Similarly, in the case of Mutual Benefit Life, annuity owners faced significant delays in accessing their funds, even though their contracts were eventually transferred to other companies. Guaranty Associations as a Safety Net One key mechanism that mitigates the impact of an insurance company failure is the state guaranty association. These organizations