- State Guaranty Association The California Life and Health Insurance Guarantee Association (contact details are in the national directory at nolhga.com) provides limited protection if an insurance company fails. California's structure is unique: the association covers 80 percent of annuity benefits, up to a maximum of $250,000 per contract owner, per insurer. Verify current limits directly with the association. Annuities are not FDIC insured.
- Annuity Tax Treatment California taxes annuity income as ordinary income at some of the highest state rates in the country, with no general retirement income exclusion. Social Security benefits are not taxed. Confirm your specific situation with a tax professional.
- State Insurance Department The California Department of Insurance regulates annuities sold in California. You can verify any insurance professional's license through its online license lookup.
- Free Look Period California provides a free look period of at least 10 days, and at least 30 days for buyers age 60 and older. Your contract states the exact period that applies to you.
- Best Interest Standard California has adopted the NAIC Best Interest standard for annuity recommendations. Advisors recommending annuities to California residents must act in the consumer's best interest.
Retiring in California
California retirees face high income taxes but strong consumer protections, including one of the longest free look periods in the country for buyers 60 and older.
Learn before you buy
Start with what an annuity actually is, then see how the types differ and which myths to ignore. If someone has already shown you a product, get a free second opinion before you sign.