State guaranty limits
Annuity coverage by state — what your state guaranty association will and won't cover if a carrier becomes insolvent, and why a strong carrier matters more.
Behind every fixed annuity sits a quiet safety net most people never hear about: a state guaranty association that can pay your contract if the insurance company behind it ever fails.
It works a little like FDIC does for bank deposits — but it isn't FDIC, the limits are set state by state, and it's deliberately kept low-profile.
This page explains what that protection actually covers, shows the standard annuity limit in every state, and — more usefully — explains why a strong carrier matters far more than the size of the backstop.
If you're weighing this against bank coverage, the difference between the two systems is worth understanding before you place a dollar.
How the guaranty system works
Every state requires licensed life-and-annuity insurers to belong to that state's guaranty association as a condition of doing business there.
If a member insurer becomes insolvent, the association can step in and honor that company's contracts — up to a statutory limit set by state law.
Which state's rules apply to you isn't about where you signed the paperwork. It's determined by the state where you live when the carrier fails.
And the cap you'll usually see quoted is a "present value" limit — the value of your accumulated balance, not the sum of all future payouts.
Set by your home state
The limit that protects you is the one in the state where you reside when the insurer goes under — not the state where the contract was issued or where the carrier is based.
Per owner, per insurer
The cap is applied once across every contract you hold with the same carrier — it doesn't reset per contract. Two annuities at one insurer share a single limit.
It's a backstop, not a selling point
Guaranty association coverage is a regulatory floor, and insurers generally aren't permitted to advertise it to win your business. Treat it as the last line of defense — the protection you hope you never need — rather than a reason to buy.
Coverage by state
The large majority of states cover annuity contract values up to $250,000 per owner per insurer — the model figure most state laws adopt. A small number set it higher, and two use a different structure entirely. Here's the whole picture at a glance before the full table:
The shape behind the tableMost states sit at the $250,000 model limit. Only a handful go higher, and two states are built differently — those are the ones worth checking.
If your state isn't one of the exceptions below, its limit is $250,000. These are the only jurisdictions that differ:
| Jurisdiction | Limit | What's different |
|---|---|---|
| Connecticut | $500,000 | Double the standard present-value cap. |
| New York | $500,000 | Double the standard present-value cap. |
| Washington | $500,000 | Double the standard present-value cap. |
| Arkansas | $300,000 | Higher than the model limit. |
| District of Columbia | $300,000 | Higher than the model limit. |
| North Carolina | $300,000 | Higher than the model limit. |
| Oklahoma | $300,000 | Higher than the model limit. |
| Pennsylvania | $300,000 | Higher than the model limit. |
| South Carolina | $300,000 | Higher than the model limit. |
| Wisconsin | $300,000 | Higher than the model limit. |
| California | $250,000 | Covers 80% of present value, not 100%, up to the cap. |
| New Jersey | $500,000 / $100,000 | $500,000 death benefit, but $100,000 net cash value. |
The full reference for all 50 states, DC, and Puerto Rico:
| State | Annuity limit (present value) |
|---|---|
| Alabama | $250,000 |
| Alaska | $250,000 |
| Arizona | $250,000 |
| Arkansas | $300,000 |
| California | $250,000 (80% of present value) |
| Colorado | $250,000 |
| Connecticut | $500,000 |
| Delaware | $250,000 |
| District of Columbia | $300,000 |
| Florida | $250,000 |
| Georgia | $250,000 |
| Hawaii | $250,000 |
| Idaho | $250,000 |
| Illinois | $250,000 |
| Indiana | $250,000 |
| Iowa | $250,000 |
| Kansas | $250,000 |
| Kentucky | $250,000 |
| Louisiana | $250,000 |
| Maine | $250,000 |
| Maryland | $250,000 |
| Massachusetts | $250,000 |
| Michigan | $250,000 |
| Minnesota | $250,000 |
| Mississippi | $250,000 |
| Missouri | $250,000 |
| Montana | $250,000 |
| Nebraska | $250,000 |
| Nevada | $250,000 |
| New Hampshire | $250,000 |
| New Jersey | $500,000 (death benefit) / $100,000 (cash value) |
| New Mexico | $250,000 |
| New York | $500,000 |
| North Carolina | $300,000 |
| North Dakota | $250,000 |
| Ohio | $250,000 |
| Oklahoma | $300,000 |
| Oregon | $250,000 |
| Pennsylvania | $300,000 |
| Rhode Island | $250,000 |
| South Carolina | $300,000 |
| South Dakota | $250,000 |
| Tennessee | $250,000 |
| Texas | $250,000 |
| Utah | $250,000 |
| Vermont | $250,000 |
| Virginia | $250,000 |
| Washington | $500,000 |
| West Virginia | $250,000 |
| Wisconsin | $300,000 |
| Wyoming | $250,000 |
| Puerto Rico | $250,000 |
State laws change. Verify your state's current limit with your state insurance department or with NOLHGA — the National Organization of Life and Health Insurance Guaranty Associations — before relying on a number here. This is a snapshot, not legal advice.
What the limit covers — and what it doesn't
The coverage is narrower and more specific than most people assume. It protects the accumulated value of a fixed contract, aggregated per insurer — and it explicitly does not bail out market losses on a variable annuity.
Covered: the contract's cash surrender value, up to your state's cap, per owner per insurer.
Aggregated by insurer: two contracts with the same carrier share one limit — not two.
Often per owner: joint owners frequently each get a separate limit, depending on the state.
Not covered: variable-annuity sub-account losses driven by market performance — those were never a guaranty.
The cap protects your value, not an above-market interest rate
Guaranty associations guarantee your contract value up to the cap — but they don't promise to keep paying an unusually high interest rate a failed carrier had advertised. Coverage of credited interest can be limited to a benchmark tied to prevailing bond yields. In practice this rarely touches a fixed annuity bought at ordinary market rates; it's one more reason to start with a carrier strong enough that none of this ever comes up.
What "present value" actually means
The most common misread of the limit is thinking it applies to the total of every payment your annuity might ever make. It doesn't. The cap is a present-value figure — what your contract is worth today, not the sum of decades of future checks.
How that number is defined depends on where your contract is in its life:
A deferred annuity (MYGA)
Still growing, not yet paying income? Its present value is simply your current account value — the surrender value on your statement. That's the number measured against the cap.
An income annuity, already paying
The association values the remaining stream at present value using a discount rate — so a lifetime payout counts for what it's worth today, typically far below the sum of every check it might pay over a long retirement.
For an accumulating contract the math is unambiguous — the balance on your statement is the number that counts:
Illustrative, in a $250,000-limit state. If that balance instead grew past the cap — say to $320,000 — the coverage would still stop at $250,000, leaving $70,000 above it. That gap is what the next section is about.
For an income annuity in payout, the exact present value is set by the guaranty association's own actuarial calculation. Ask your state's association to confirm how your specific contract would be valued.
Why this matters less than you'd think
The guaranty association is a real safety net, but it's the wrong thing to fixate on. Insurer insolvency is rare.
State regulators require strict reserves and capital ratios, and most carriers that get into trouble are acquired or rehabilitated rather than failing outright. The historical record shows fixed-annuity holders have very rarely lost principal to an insolvency.
The real protection is the carrier itself
GetSure only recommends carriers rated A− or better by AM Best — companies with the balance-sheet strength to honor their obligations regardless of what the guaranty association would or wouldn't cover. Choosing strength up front is worth far more than the size of the backstop behind it. Here's how those ratings work.
If you have more than the cap to place
Say you live in a $250,000-limit state and want to place $400,000. You don't have to choose between coverage and a good rate.
Because the cap resets for each separate insurer, splitting the deposit across two financially strong carriers keeps every contract comfortably inside your state's per-insurer limit — the annuity version of spreading bank deposits across institutions for FDIC.
One cap per insurer — so two insurers means two capsSplit $400,000 across two carriers and each $200,000 contract sits well under its own $250,000 backstop.
Illustrative. Split so each contract stays within your state's per-owner, per-insurer limit, and confirm each carrier's strength before placing.
Check carrier strength with the AM Best rating guide, then place each piece from the live rate marketplace, where rates update weekly by term.
How this compares to FDIC
The two systems rhyme, but they aren't the same thing — and the differences matter when you're deciding where to keep money you can't afford to lose.
| FDIC (banks) | State guaranty (annuities) | |
|---|---|---|
| Backed by | Federal government | State associations |
| Typical limit | $250,000 | $250,000 |
| Limit varies by state | No | Yes |
| Advertised to you | Yes | Generally not |
Both commonly land at $250,000 per owner per institution, but FDIC is a uniform federal program while guaranty coverage is a state-by-state regulatory backstop.
How to confirm your state's limit
State laws change, and the fine print — how a limit applies to joint owners, death benefits, or an income stream — is set by your state's own statute. Before you rely on any number, take five minutes to confirm it at the source:
Look up your state at NOLHGA.com — the National Organization of Life and Health Insurance Guaranty Associations — which links to every state association.
Confirm the present-value limit for annuities specifically — separate from any life-insurance or death-benefit figure.
If two people own the contract, ask whether joint owners each get a separate limit in your state — many do.
Check the carrier's AM Best financial-strength rating first — the limit is the last line of defense, the rating is the first.
Frequently asked questions
Is a fixed annuity FDIC-insured?
No. FDIC covers bank deposits; annuities are backed by the issuing insurer and, as a backstop, by your state's guaranty association up to its limit. See how the two protections compare.
Does the cap apply to my total future payments?
No — it's a present-value limit. For a deferred annuity that's your current account value; for an income annuity in payout it's the worth today of the remaining stream, which is typically far below the sum of all the checks it might ever pay. The limit measures what your contract is worth now, not its lifetime total.
Can my money be frozen while a failed carrier is sorted out?
It can. During a rehabilitation a regulator may impose a temporary moratorium that pauses withdrawals and surrenders — even on a fully covered contract — while the business is stabilized or transferred to a healthier insurer. Scheduled income payments generally continue. It's another reason strength up front beats leaning on the backstop.
Which state's limit applies to me?
The state where you live at the time the carrier becomes insolvent — not where you bought the contract or where the insurer is headquartered.
Should I pick a carrier based on its state's coverage limit?
No. The limit is set by your home state, not the carrier's, so you can't shop it. Focus on the carrier's AM Best financial-strength rating instead — that's what actually keeps your contract whole.
Where can I verify my state's current limit?
Look up your state at NOLHGA.com, the National Organization of Life and Health Insurance Guaranty Associations. Limits change with state legislation, so confirm before relying on a number.
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