When someone asks Phil which annuity company is the safest, the real question is narrower: if I hand this company $200,000 today, will the checks still arrive in 2050? An immediate annuity cannot be moved once it is bought, so the strength of the insurer is the one decision you have to get right before you sign. Financial strength ratings are the tool for that job. They are also widely misread. This guide explains what the four rating scales mean, which carriers hold the top grade in 2026 (and which of them will actually sell you an immediate annuity), what happens if an insurer fails, and how much income the strongest names give up compared with the best quote in the market.
How AM Best, S&P, Moody's and Fitch Grade Insurers
Four agencies rate the financial strength of US life insurers. AM Best rates only insurance companies and is the grade most annuity buyers see. S&P Global, Moody's and Fitch are general credit agencies that publish an insurer financial strength rating alongside their bond ratings. Each rating is an opinion of the company's ability to meet its policy and contract obligations over time. It is not a guarantee, and it says nothing about how good the product is or how much it pays.
The most common mistake is assuming A+ is the top grade. At AM Best it is not. AM Best's scale, set out in its Guide to Best's Financial Strength Ratings, has 13 rating levels running from A++ down to D. The top category, Superior, holds two of them: A++ and A+. Excellent is the next category, A and A-. Then come Good (B++, B+), Fair (B, B-), Marginal (C++, C+), Weak (C, C-) and Poor (D). AM Best also uses E, F and S for companies under regulatory supervision, in liquidation, or with a suspended rating, which is why some sources describe the scale as 16 steps.
The other three agencies use scales that look like bond ratings, and the same letter means a different rank on each. A flat A is third from the top at AM Best but sixth at S&P and Fitch, behind AAA, AA+, AA, AA- and A+. Fitch made this point itself in a July 2016 white paper arguing that an AM Best A- has historically behaved more like a BBB on the other three scales (Not All Insurer Financial Strength Ratings Are Created Equal, hosted by the NAIC). The table lines up the top six positions on each scale. The category labels for AM Best, S&P and Moody's are the agencies' own, as reproduced in Penn Mutual's rating definitions sheet; Fitch uses the same letter grades as S&P, so its column shows the grade alone.
| Rank | AM Best (13 levels) | S&P | Moody's | Fitch |
|---|---|---|---|---|
| 1 | A++ (Superior) | AAA (Extremely strong) | Aaa (Highest quality) | AAA |
| 2 | A+ (Superior) | AA+ (Very strong) | Aa1 (High quality) | AA+ |
| 3 | A (Excellent) | AA (Very strong) | Aa2 (High quality) | AA |
| 4 | A- (Excellent) | AA- (Very strong) | Aa3 (High quality) | AA- |
| 5 | B++ (Good) | A+ (Strong) | A1 (Upper medium grade) | A+ |
| 6 | B+ (Good) | A (Strong) | A2 (Upper medium grade) | A |
Three habits separate a careful reader of ratings from a casual one. First, the rating belongs to the legal entity that issues your contract, not the brand on the brochure. New York Life's income annuities are issued by New York Life Insurance and Annuity Corporation, a subsidiary AM Best rates alongside the parent, and Guardian's immediate annuity is issued by The Guardian Insurance & Annuity Company. Ask whose name will be on the contract and check that company. Second, look at the outlook (stable, positive or negative) and the date of the last affirmation; a rating affirmed two months ago tells you more than one affirmed three years ago. Third, ratings move. State Farm's life companies held A++ for years and were cut to A+ on November 14, 2025.
The A++ List in 2026, and Who Actually Sells an Immediate Annuity
A++ is rare. AM Best rates a long list of US life and annuity insurers, and only a few of them hold its top grade. We checked each of the names most often cited against AM Best's own rating announcements, or the carrier's published ratings page where that was the only copy we could reach. Six confirmed. One did not, and that one is worth knowing about.
| Company | AM Best rating (latest affirmation) | Sells an immediate annuity? |
|---|---|---|
| New York Life | A++, affirmed July 23, 2026, including NYLIAC. Also AAA from Fitch, Aa1 from Moody's and AA+ from S&P, which New York Life describes as the highest currently awarded to any US life insurer. | Yes. The Guaranteed Lifetime Income Annuity, issued by NYLIAC, sold by New York Life's own agents and quoted by independent agents. It is in our published tables. |
| Northwestern Mutual | A++, affirmed November 2025, with the same four top grades as New York Life (company release). | Yes, the Select Immediate Income Annuity, sold through Northwestern Mutual's own financial advisors. We have not seen it offered through independent agents. |
| Guardian | A++, affirmed September 12, 2025, including The Guardian Insurance & Annuity Company. Aa1 from Moody's and AA+ from S&P as of December 31, 2025 (Guardian). | Yes. The Guardian Guaranteed Income Annuity III, issued by The Guardian Insurance & Annuity Company. |
| MassMutual | A++, affirmed October 23, 2025, including MassMutual Ascend. | Yes. MassMutual RetireEase, a single premium immediate annuity issued by Massachusetts Mutual Life Insurance Company. |
| USAA | A++ for USAA Life Insurance Company, affirmed June 25, 2026. | Yes. USAA sells its immediate annuity directly to members and, by its own account, to non-members through a few partner broker-dealers. It does not sell through independent agents, so confirm eligibility with USAA. |
| TIAA | A++ for Teachers Insurance and Annuity Association of America, affirmed July 23, 2026. | Its lifetime income annuities are offered through employer retirement plans and TIAA accounts, not through independent agents, so it will not appear on a multi-carrier quote sheet. |
| State Farm | A+ since November 14, 2025, down from A++, outlook stable. AM Best said the life companies had been profitable in each of the past five years; they were cut because they lost the rating lift they drew from the parent, whose auto and homeowners lines had five straight years of underwriting losses. | Through State Farm agents only. |
What the list does not tell you is price or access. Three of the six A++ carriers sell only through their own channels, so a buyer comparing quotes from an independent agent will usually see one or two A++ names on the sheet, not six. In our published rate tables, New York Life is the only A++ carrier; the other 7 are A+ or A. That is normal for this market, and it is why the ratings question always comes paired with the price question further down.
Ratings for the Annuity Companies People Search Most
These are the carriers behind the most common "is this company safe" searches, with the grades shown on each company's page on this site. Two of them, MetLife and Allianz, are financially strong companies that do not sell an immediate annuity at all, which surprises a lot of people who searched for them by name.
| Company | AM Best | S&P | Moody's | Fitch | Sells a SPIA? |
|---|---|---|---|---|---|
| MassMutual | A++ | AA+ | Aa3 | AA+ | Yes |
| New York Life | A++ | AA+ | Aa1 | AAA | Yes |
| Allianz Life | A+ | AA | Aa3 | n/a | No |
| MetLife | A+ | AA- | Aa3 | AA- | No |
| Mutual of Omaha | A+ | A+ | A1 | n/a | Yes |
| Nationwide | A+ | A+ | A1 | n/a | Yes |
| Pacific Life | A+ | AA- | Aa3 | AA- | Yes |
| Prudential Financial | A+ | AA- | Aa3 | AA- | Yes |
| Western & Southern | A+ | AA- | Aa3 | AA | Yes |
| Lincoln Financial Group | A | A+ | A2 | A+ | Yes |
MetLife's retail annuity and life business went to Brighthouse Financial in a spin-off completed on August 4, 2017, so there is no MetLife immediate annuity for a new retail buyer to purchase. Allianz Life sells fixed index annuities and registered index-linked annuities, some with income options, a different product from a SPIA. Both company pages explain what to compare instead.
If an Annuity Company Fails: State Guaranty Associations
Every state has a life and health insurance guaranty association, funded by assessments on the other insurers licensed there, that steps in when a member insurer is ordered into liquidation. The process is slower and more orderly than a bank run. The insurance commissioner in the company's home state first tries to rehabilitate it; if that fails, a court orders liquidation and a receiver takes control of the assets. From that point the guaranty association in your state of residence covers your contract up to its statutory limit, regardless of where you bought it, and a financially sound insurer often takes over the covered policies so payments continue (NOLHGA). Since 1983 the system has worked through more than 100 multi-state insolvencies, protecting more than 2.85 million policyholders and guaranteeing more than $25.88 billion in benefits (NOLHGA).
The limits are what matter to an annuity buyer. In most states the association covers $250,000 in present value of annuity benefits per owner, per failed insurer, with an overall cap of $300,000 per person across all contracts with that insurer (NOLHGA FAQ). Texas and Arizona use exactly those figures (Tex. Ins. Code §463.204; A.R.S. §20-682). Some states go higher. New York, New Jersey, Connecticut and Washington cover $500,000 (NY Ins. Law §7708; NJLHIGA; CTLHIGA; RCW 48.32A.025), and Pennsylvania, North Carolina and a handful of others cover $300,000 (PA LHIGA; N.C.G.S. §58-62-21). Two wrinkles matter for an immediate annuity in particular. Florida covers $300,000 for an annuity that is already paying out but only $250,000 of cash value in a deferred annuity (FLAHIGA), and New Jersey draws the same line at $500,000 and $250,000, so a SPIA gets the higher figure in both states. California covers 80% of the contract's value up to a $250,000 ceiling (Cal. Ins. Code §1067.02), so a $200,000 immediate annuity there is protected to $160,000, not $200,000. Amounts above the limit become a claim against the failed insurer's estate, which may pay something more over time. Limits and definitions change, so confirm with your own state's association before you rely on a figure.
Two practical conclusions follow. If you plan to put $400,000 into an immediate annuity and your state's limit is $250,000, splitting the premium between two strong carriers brings the whole amount inside the safety net, and it usually costs little or nothing in payout. And the guaranty fund is a backstop, not a feature. State law generally bars anyone selling insurance from using the association's existence to make the sale (Texas puts it in Ins. Code §463.451, and most states have a similar section), and no one should choose a weaker carrier for an extra $10 a month on the theory that the state will cover them.
Does the Safest Company Pay the Most?
In our tables today, yes, and that can change. Our rate tables as of October 1, 2026 cover 8 carriers on the same basis: a $100,000 premium, single life with a 5-year period certain, income starting one month after purchase. New York Life is the only A++ carrier among them, and at every age shown below it also has the best figure. None of the figures in our tables is a direct quote from the latest survey round. They are built from earlier rounds (read at surveyed ages, interpolated or derived from carrier ratios) and checked carrier by carrier against the latest one. Figures as of ; see how we build them.
| Basis | New York Life (A++) | Best figure in our tables | Gap per month | Gap per year |
|---|---|---|---|---|
| Man, 65 | $693 | $693 (New York Life, A++) | $0 | $0 |
| Man, 70 | $767 | $767 (New York Life, A++) | $0 | $0 |
| Man, 75 | $893 | $893 (New York Life, A++) | $0 | $0 |
| Woman, 65 | $658 | $658 (New York Life, A++) | $0 | $0 |
| Couple, both 65 | $608 | $608 (New York Life, A++) | $0 | $0 |
For a 65-year-old man, the A++ carrier is also the best payer in our tables as of October 1, 2026, so the top grade costs nothing in payout today. That can change when carriers reprice. Meanwhile the lowest figure at 65 in the same tables, $573, comes from Lincoln Financial, rated A. A lower rating did not buy a higher payout. Pricing depends on a carrier's appetite for a given age and structure, the yield on the bonds it is buying that month, and how much business it wants, far more than on its rating. A carrier can be strong and cheap, or strong and expensive.
How we would use this across a desk. Set a floor first: A- at AM Best is the lowest grade we would consider for a promise that has to last 30 years, and most of Phil's clients end up with A or better. Above the floor, choose on payout, on the payout options you need (a cash refund, a longer period certain, inflation step-ups) and on how the carrier handles service. If the A++ quote is within $15 a month of the best one, plenty of buyers take the A++ carrier and stop thinking about it. If the gap is $60 a month, that is $720 a year for the rest of your life, and an A+ carrier with a stable outlook is a perfectly reasonable place to put it. Splitting between the two is the third answer, and it also solves the guaranty-limit problem above.
What to Do Next
There are four steps, and the order matters.
- Set your floor. Decide the lowest AM Best grade you will accept (A- at minimum, A or better if you want to stop worrying) and check the rating of the issuing company, not the brand.
- Get quotes on one basis. Same age, same premium, same payout option, same start date, from several carriers at once. Our guide to comparing SPIA quotes shows what to line up, and the age 65 rate page shows the current spread.
- Check your state's guaranty limit. Find it on your state page, and if your premium is larger, ask for the quote split across two carriers.
- Weigh the gap. Put the A++ quote next to the best quote and decide what the extra strength is worth to you per month.
Phil runs the multi-carrier quote at no cost and lists each carrier's AM Best rating next to its payout, so the rating and the price sit on one page. Request a quote here, or run the numbers yourself first with the payout calculator.
