Annuity Companies To Avoid In 2026
Sentinel Security Life Shut Down
Updated for 2026: I first wrote this at the end of 2025, and nothing about it has aged. If anything, the private equity problem has only grown — more companies, more offshore assets, higher rates dangled to pull in cash. Everything below still stands. Be picky.
It’s time to be picky with the annuities you choose for retirement. I’ve always thought it is important to be incredibly selective, and that approach has cost me a fair bit of business over the years. Interest rates have been far more attractive in the last couple of years, and many people wanted the absolute highest rates possible. Although it did cause me to add several new companies to what I offer, for the most part, I stuck with companies that I knew very well. At times, I couldn’t offer the highest interest or income payouts because I refused to use the company with the best rate.
Near the beginning of December 2024, Sentinel Security Life was barred from writing new business. Domiciled in the state of Utah, the insurance commissioner deemed the investment portfolio of the company to be too risky and put a stop to new sales. The company is of course going to appeal this decision. I hope it works out for all the policyholders but it’s not at all the type of thing anyone wants to deal with after choosing a safe product for retirement.
Sentinel has been very competitive with MYGAs and guaranteed income contracts for several years. The company rating was B+ so I never touched it. On top of that, customer service reviews were awful so it wasn’t hard for me to disregard this option. I spoke with several people who went ahead with a slightly better deal and chose to take the risk. I’m glad I don’t have to hold anyone’s hand through this. Maybe it works out but it could also get ugly. Almost every other annuity website posted Sentinel’s rates so I assume they have some explaining to do. Certain advisors touted state guaranty funds as a safeguard against insolvency and I’ve written about why that’s a ridiculous claim, not to mention something we are barred from doing.
The problem is what Kerry Pechter calls the Bermuda Triangle for insurance companies. That’s a good resource for anyone who wants to fact-check me. Basically, it allows insurance companies to use offshore holding companies to buy assets that chase higher investment returns but don’t have to be specifically disclosed on the company balance sheet. The most solid insurance companies have 90% or more of their assets held in high-grade bonds. Using alternative assets for an increasing percentage of the portfolio obviously brings more risk. With companies like Sentinel getting into trouble, it shows that regulators are taking a closer look at this questionable system of accounting.
Private equity is the issue. Large investment companies wanted access to the large pool of cash available at insurance companies. They buy some smaller companies, slap a catchy new name on them, and take the assets offshore where they can do anything they want. Oh yeah, they also jack the rates on annuity products so they can gather even more assets. A reliable source told me a few years ago that some of these companies are losing money on their MYGAs. The only way they can stay solvent is to chase returns that exceed what is guaranteed. I shouldn’t have to tell anyone that it may not work out in the long run. Strong global markets in the past few years have certainly made this practice profitable, but just wait til there’s some real economic turmoil.
Private equity-led insurance companies have products all over the place, and I stay away from them. I’m going to be a lot more vocal about this going forward, and you should pay attention. Annuities are supposed to be the most solid foundation of a retirement portfolio. Greed has no place here, so focus on fundamentals, even if you have to take a slightly lower rate. If you disagree, then go ahead and take your business elsewhere.
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My Screen for Annuity Companies to Avoid
The company matters more than the rate. An annuity promise is only as good as the carrier standing behind it, so I start with financial strength, ownership, investment portfolio, and service record before I ever look at the payout.
If a company falls below an A- rating, I’m usually out. If the story depends on a private-equity owner squeezing more yield out of the general account, I slow down. If the only reason to buy is a slightly higher MYGA rate, I probably don’t need to see anything else.
You are not buying a CD. You are handing retirement money to an insurance company and asking it to keep a contractual promise for years. That calls for boring, solid, well-capitalized carriers.
A few extra basis points are not worth a decade of bad service, opaque reinsurance, or a regulator stepping in after the fact. Safety first. Rate second. If that means I can’t show the very highest rate on the internet, so be it.
Smaller Fixed Annuity Carriers: When to Be Careful
Smaller carriers are not automatically bad. Some are well-run, conservative, and perfectly capable of meeting their obligations. The issue is that a fixed annuity buyer often gets drawn in by the top rate without asking why that company has to pay more than everyone else.
That matters with MYGAs because the product feels simple. You put in money, the carrier credits a fixed rate for a set number of years, and you avoid market loss. Nothing flashy.
But the simplicity of the product does not erase carrier risk. If the company has a weaker rating, limited operating history, poor service record, or ownership structure that relies heavily on alternative assets and reinsurance, the extra interest may not be worth the trade-off.
I’d rather give up a little yield and use a company I trust than spend years hoping the highest-rate carrier can make the math work. Safe money is supposed to be safe. Don’t let a slightly better rate talk you into ignoring the fundamentals.
Canvas Annuity comes up a lot in my inbox. It’s the direct-to-consumer brand of Puritan Life, a smaller carrier that sells without independent agents — so if something goes sideways, nobody works for you on the way in or the way out. The rates look attractive, which is exactly why it deserves a closer look. I cover the company’s ratings, products, and who it might actually suit in my full Canvas Annuity review.
Have a great weekend…
Bryan
Watch Podcast Episode 165 – Annuity Companies To Avoid in 2026
Download Episode 165 – Annuity Companies To Avoid in 2026 on Apple Podcast
Last Updated on August 8, 2026 by Bryan Anderson
What do you think of Gainbridge ?
Private equity – higher rates than anyone else with customer service lacking and no agents to help. Just know that you will be on your own.
What is your opinion about Ameritas or Nassau Life for income riders? Thanks
I don’t know anything about Ameritas and you can get something similar with another company that is more well known. I’d stay far away from Nassau because they are owned by private equity, only rated B+, and have a big mess to deal with after acquiring the failing company, PHL Variable Life.
You don’t have to go with obscure companies to get the deal that will work best for you.
How about American Equity and EquiTrust?
Those were both mentioned in the podcast as companies to avoid.
What do you think of Canvas Annuity (Puritan Life)? 3-yr, 6%, BB+ rating. My first venture from CD’s to annuity….extremely cautious.
I would never suggest you buy something that is rated B+ if you are cautious about safety. Canvas is a brand new company with private equity backing who is consumer direct so independent agents cannot access the company. You are on your own with that. Best of luck!
Should I move the money I have in a Sentinel Life annuity?
Probably not but make an appointment with me if you’d like to talk specifics.
What do you think of Silac Annuities ?
Not anywhere near worth considering.
Hi I work for Target Corporation I’m retiring soon Target users ***** Investment Service for annuity I’m rolling all my 401k to lifetime annuity @ 560k at $2300 a month for life is that reasonable? Thanks
That seems low to me but it depends on your age and single vs joint payout. Set up an appointment if you want to give me more details.
Hi, would you recommend avoiding any of the following (for a MYGA): Pacific Guardian Life, Oxford Life, AmFirst/Axonic, Americo? Also, any thoughts about Weiss ratings vs AM Best ratings? Thank you!
I have used Oxford once and Americo frequently because neither have outrageous rates. The others mentioned are heavily influenced by private equity and I stay away from them.
You can use either Weiss or AM Best. There’s a big difference between the two because Weiss grades financial strength with incredibly strict criteria. Most people don’t have the sophisticated knowledge of financial analysis required to properly evaluate the difference. Either system is credible but just to different degrees. It’s your money so you get to choose.