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You have spent decades building your retirement savings. Now, you want to know that the money will be there when you need it.
The appeal of an annuity is understandable. Depending on the contract, it can offer a guaranteed interest rate or income that continues for life. But those promises depend on the financial strength and claims-paying ability of the insurance company issuing the contract. Protection from stock-market losses is not the same as protection from every risk.
Before asking, “What does this annuity pay?” there is another question worth answering:
Who stands behind the guarantee—and how much of your retirement are you depending on that company to support?
A troubling reminder about financial transparency
Recent reporting by The Wall Street Journal examined concerns involving Delaware Life and Clear Spring Life and Annuity, including scrutiny of how investments connected to affiliated businesses were disclosed. The story brings an important retirement-planning issue into focus: evaluating a promise requires reliable information about the company making it.
On July 31, 2026, AM Best reported that a reclassification changed Delaware Life’s disclosed affiliated investments from 3% to 42% of invested assets at year-end 2025. This was a revised classification of the year-end portfolio—not evidence that all those investments had suddenly been made that summer. AM Best cited weaknesses in financial-reporting controls and a material reduction in risk-adjusted capitalization under its analytical model. It affirmed the A− financial-strength ratings of Delaware Life and Clear Spring Life and Annuity while changing their outlooks to negative.
That distinction matters. A negative outlook is not an actual rating downgrade, and an investigation is not proof of wrongdoing. These disclosures do not establish that the insurers are insolvent or that policyholders will suffer losses.
There is also a company response that deserves attention. In a September 11 update, Delaware Life said the accounting corrections did not change its reported capital and surplus or earnings for 2024 or 2025. It described an agreement to exchange up to $6.5 billion of certain affiliated investments for nonaffiliated investments, subject to regulatory approval, along with planned improvements to its controls. Those are steps the company says it is taking—not a reason to treat the matter as resolved.
Our concern is straightforward: When the disclosed picture of an insurer’s investments changes that substantially, how complete was the information retirees and their advisers relied on when evaluating the guarantee?
A simple contract does not necessarily mean simple underlying risks
A fixed annuity can have a relatively straightforward promise. A fixed-indexed annuity can protect against negative index-linked interest credits while calculating potential interest through a contractual formula. But neither structure makes the issuing insurer’s financial condition irrelevant. These products should also not be confused with variable annuities or registered index-linked annuities, which have different market-loss risks.
The lesson is not that every annuity is unsafe. It is that the product and the company must both be evaluated.
Think about the distinction this way: a contract may clearly explain what you are owed. That does not eliminate the need to understand the financial strength of the party that owes it to you.
Annuities also are not FDIC-insured, even when purchased through an FDIC-insured bank. A familiar bank lobby does not turn an insurance contract into an insured bank deposit.
We believe any conversation about safety should explain these distinctions as clearly as it explains the advertised interest rate.
Look beyond the illustration
The insurer’s financial condition is one question. Understanding what the contract actually delivers is another.
With fixed-indexed annuities, the index’s return and the interest credited to your contract are not necessarily the same. Caps can limit credited gains. Participation rates determine how much of an index’s gain is used. Spreads or other adjustments can reduce the result. Some contracts permit the insurer to change certain provisions over time.
The Journal also highlighted concerns about marketing that uses reconstructed historical performance for indexes that did not exist during the periods shown. A back-test is not a record of what actual annuity owners earned.
Our recommendation is to insist on a clear separation between what is contractually guaranteed and what is merely illustrated.
Ask the person presenting the annuity to explain the outcome under less favorable assumptions—not just the attractive scenario on the page. Ask which terms can change. Ask what money would actually be available if your circumstances changed.
An illustration should help you understand a contract. It should not distract you from reading it.
The safety net has limits
State insurance guaranty associations provide important protection when covered insurers fail, but that protection has eligibility requirements, exclusions, and limits.
For example, the Alabama Life & Disability Insurance Guaranty Association generally limits covered annuity benefits to $250,000 in present value per contract owner, per member insurer. Multiple contracts with the same insurer do not create a separate protection limit for each contract. Coverage in other states must be evaluated under the applicable state’s rules.
Amounts above the applicable limit are not necessarily lost; they may become claims against the failed insurer’s estate. But receiving money eventually and having uninterrupted access to it are different matters. Alabama’s association warns that court proceedings can reduce or suspend benefit payments while an insurer’s affairs are addressed.
For a retiree, that raises a practical planning question:
Could your household continue paying its bills if access to part of your retirement money were interrupted?
We would not treat guaranty-association protection as a substitute for evaluating an insurer or maintaining adequate accessible resources.
Already own an annuity? Review before reacting.
A concerning headline is a reason to investigate—not automatically a reason to surrender your contract.
Early withdrawals can trigger surrender charges and tax consequences. Depending on the contract, an early exit can reduce the amount you receive below what you invested. An impulsive reaction can create a very real cost before you have determined whether a change is warranted.
A useful review should address three questions:
- What do you own? Identify the exact issuing insurance company, the contractual guarantees, the current surrender value, and the withdrawal restrictions.
- How dependent are you on it? Determine how much of your savings and essential retirement income rely on that insurer, and what other accessible resources are available.
- What would changing it accomplish? Compare keeping the contract with any proposed alternative, including costs, benefits surrendered, and new risks accepted.
The decision to buy a new annuity is not identical to the decision to keep an existing one.
We would be equally cautious about someone dismissing every concern and someone using the headlines to pressure you into an immediate replacement.
Start with the retirement plan—not the product
Annuities can serve a legitimate purpose. A suitable contract can help address the possibility of outliving your money by providing lifetime income. That benefit deserves consideration rather than dismissal.
But our starting point is not, “Which annuity has the highest rate?”
It is, “What does your retirement plan need?”
How much income must your savings provide after Social Security and other income sources? How much flexibility do you need? What happens after the death of a spouse? How will you address rising expenses, unexpected withdrawals, and taxes?
At CochranMickels Retirement Specialists, we focus on coordinating retirement income, Social Security, taxes, investments, and legacy decisions—not evaluating one product in isolation.
A product should have to earn its place in that plan.
The lesson is not “never buy an annuity.” It is “never mistake an annuity’s guarantee for a complete retirement risk-management plan.”
You worked too hard for your savings to settle for an explanation that ends with, “Don’t worry. It’s guaranteed.”
You deserve to understand exactly what is promised, what it costs, what can change, and who is responsible for delivering it.
YOUR Retirement on YOUR Terms.
Before purchasing, replacing, or committing additional retirement savings to an annuity, consider how that decision fits your complete retirement-income strategy.
Want to learn more? Call us at 256-417-4870 in Huntsville or 407-220-1040 in Orlando.
Information about the insurers reflects sources available as of September 14, 2026. This article is not a recommendation to purchase, surrender, exchange, or retain a particular annuity. Contract provisions and guaranty-association eligibility and limits vary.
Investment Advisory Services are offered through CochranMickels Retirement Specialists, LLC., a state-registered investment advisor domiciled in Alabama.
This content is intended solely for informational purposes. CochranMickels Retirement Specialists, LLC and its representatives are only authorized to offer advisory services where properly licensed or exempt from licensure. Investing carries risks, including potential loss of principal capital. Our firm does not endorse external links, nor is it responsible for third-party content. Mike Mickels is the President and Chief Compliance Officer of CochranMickels Retirement Specialists, LLC, and an avid sporting clay competitor. Investment advisory services are offered through CochranMickels Retirement Specialists, LLC., a state-registered investment advisor firm domiciled in Alabama and also registered in Florida. Our firm provides personalized planning and investment services to individuals approaching and in retirement.