Don’t worry. Only a handful of small insurers that sell annuities have gone broke in recent years, and all companies licensed to sell annuities in a state must be members of the state’s guaranty association, which protects consumers in case the insurer becomes insolvent. If an insurer starts to have financial trouble, the insurance regulator in its home state works with the guaranty association to find another company to take over its business. The transition can be seamless if the regulator steps in early.

If regulators can’t find another insurer, the guaranty association coverage kicks in. All states cover at least $250,000 in annuity benefits, and 12 states and the District of Columbia have limits of $300,000 or more. You should split your annuity investments between two or more insurers if that will keep you below the limits. (For state links, go to www.nolhga.com.) For extra protection, look for a company with a financial strength rating of B+ or higher from A.M. Best. You can search insurers at www.ambest.com/consumers.