Who Bears All Of The Investment Risk In A Fixed Annuity? 
When you purchase a fixed annuity , your premiums are put into the insurance company 's general account which holds the vast majority of their investments . Insurance companies have an excellent track record of investing in rock solid assets and you should check their financial stability and credit ratings through services such as A.M. Best and Standard Poor 's rating services . The insurance company guarantees your principal plus a minimum rate of return . The insurance company bears the investment risk of your fixed annuity . That does n't clear you of risk altogether . Insurance companies always add the caveat that guarantees are based on the claims paying ability of the insurance company . So , in the end , the annuity owner bears a certain level of risk as well . You need to weigh that risk against other places you put your investments and decide which institution fits your risk profile . 