State annuity protection

Massachusetts Annuity Guaranty Protection: $250,000 Limit Explained

Massachusetts generally provides up to $250,000 in protection for the present value of covered annuity benefits, subject to ownership, residency, and other statutory requirements.

Massachusetts annuity protection at a glance

Annuity benefit limit
$250,000
Present value of covered annuity benefits, including eligible net cash surrender and withdrawal values, subject to Massachusetts eligibility requirements and exclusions.
Overall benefit cap
$300,000
After product limits are calculated, section 146B ordinarily permits no more than $300,000 across covered benefit categories for one life, including applicable health benefits; certain major-medical-type coverage may qualify for a $500,000 aggregate.
Who provides protection
Massachusetts Life and Health Insurance Guaranty Association
The Massachusetts Life and Health Insurance Guaranty Association provides statutory protection for covered obligations of impaired or insolvent member insurers.
Insurer requirement
Member insurer
The issuing insurer must qualify as a member insurer under Massachusetts law.

How the $250,000 limit works

Massachusetts generally limits covered annuity benefits to $250,000 in present value with respect to one life, subject to ownership and other eligibility requirements.

The $250,000 limit applies with respect to one life, regardless of the number of annuity contracts involved.

Coverage is generally evaluated separately for each impaired or insolvent member insurer. Residency is determined when the insurer first becomes impaired or insolvent under Massachusetts law.

After product limits are calculated, section 146B ordinarily permits no more than $300,000 across covered benefit categories for one life, including applicable health benefits; certain major-medical-type coverage may qualify for a $500,000 aggregate.

  • Massachusetts provides a separate $250,000 present-value ceiling for each qualifying structured-settlement payee or beneficiary of a deceased payee.
  • Certain covered health-plan benefits may qualify for a higher $500,000 aggregate.

A $300,000 annuity example

Assume an individual owns an eligible fixed annuity with a covered present value of $300,000.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

In this example, up to $250,000 may qualify for guaranty association protection, while the remaining $50,000 may remain a claim against the insurer’s receivership estate.

This example assumes an individually owned eligible annuity and illustrates only the statutory coverage limit.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    An individually owned fixed annuity may qualify when legal ownership is properly recorded by the insurer.

  • Fixed indexed annuity (FIA)

    Generally covered

    FIAs are generally covered, although nonguaranteed benefits and certain uncredited, forfeitable, or excess index-linked amounts may be excluded. Special treatment applies when index-linked value is credited less frequently than annually.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    MYGAs are generally covered as fixed deferred annuities, subject to Massachusetts’ $250,000 limit and statutory interest-rate restrictions.

  • Variable annuity

    Guaranteed portions may be covered

    Only insurer-guaranteed benefits may qualify; investment risk borne by the contract owner is generally excluded.

  • Registered index-linked annuity (RILA)

    Contract-specific

    For a RILA, only insurer-guaranteed obligations may qualify; portions where the owner bears market or index risk are generally excluded.

  • Unallocated annuity contract

    Generally excluded

    Annuity contracts not issued to and owned by an individual are generally excluded, except to the extent specific annuity benefits are guaranteed to an individual.

Who may qualify?

  • Residency is generally determined when the member insurer first becomes impaired or insolvent under Massachusetts law.
  • Coverage generally follows the legal owner identified in the contract or through a valid, properly recorded assignment; a purely beneficial interest does not by itself establish ownership.
  • A nonresident may qualify in limited circumstances, generally when the failed insurer is Massachusetts-domiciled and the person is not eligible for protection in their state of residence.
  • Massachusetts can become responsible for certain nonresidents when it is the insurer’s domiciliary state and the residence association does not cover the claim.
  • The issuing insurer must qualify as a member insurer under Massachusetts law.

What is not covered?

  • An annuity not issued to and owned by an individual is excluded except to the extent of benefits guaranteed to an individual.
  • An incomplete or improperly recorded assignment may affect who qualifies as the legal contract owner.
  • Massachusetts may omit nonguaranteed excess or forfeitable index value, with a separate rule for contracts whose crediting interval exceeds one year.
  • Trust-owned and other non-individual ownership structures may require case-specific review.
  • Massachusetts excludes claims based on marketing materials, unapproved side agreements, misrepresentation, bad faith, extra-contractual relief, punitive awards, legal fees, penalties, or consequential and incidental loss.

What happens after an insurer fails?

  1. 1

    Insurer becomes impaired

    The guaranty association may become involved once the statutory impairment or insolvency conditions are met.

  2. 2

    Residency is determined

    Residency is determined using the date specified by Massachusetts law.

  3. 3

    Ownership and eligibility are reviewed

    The association reviews the contract’s legal ownership and other statutory eligibility requirements.

  4. 4

    Coverage limits are applied

    The applicable annuity and aggregate limits are applied, and amounts above guaranty protection may remain claims against the receivership estate.

How the guaranty system is financed

Massachusetts relies on assessments of member insurers to support covered obligations created by a failure.

Assessment allocation
Member insurers
The Association is funded through assessments of member insurers, allocated according to Massachusetts’ statutory account and premium rules.
Annual assessment cap
Defined by state law
For each account, Massachusetts limits a member insurer’s calendar-year total to 2% of its average Massachusetts premiums on covered policies. The base uses the three calendar years before the impairment or insolvency year.
Premium-tax treatment
State-specific rule
Massachusetts permits qualifying non-Class-A assessments to reduce premium, excise, franchise, or income tax over five following years at 10% annually, subject to the $3 million statewide yearly cap.
Section 146B assessment system
Assessment funding does not change the statutory eligibility requirements or coverage limits.

What to know before buying

  • For unusual ownership arrangements, including trusts or assignments, confirm how the contract is legally titled before relying on guaranty coverage.
  • Section 146B prohibits using the association’s existence in advertising, solicitation, or inducement to purchase covered insurance.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Massachusetts guaranty protection may apply to eligible annuity obligations issued by member insurers, subject to statutory ownership and coverage rules.
    FDIC: FDIC insurance covers eligible bank deposits; annuities are not FDIC-insured deposits.
  • What system stands behind it
    State protection: The Massachusetts guaranty association provides statutory protection for covered obligations of impaired or insolvent member insurers.
    FDIC: The FDIC stands behind deposits at banks admitted to its federal insurance program.
  • Coverage-limit basis
    State protection: Massachusetts generally applies $250,000 per covered life and company, subject to a $300,000 ordinary aggregate.
    FDIC: Federal limits depend on the depositor’s ownership capacity at each insured bank.
  • Whether it applies to annuities
    State protection: An eligible Massachusetts annuity may receive section 146B protection, but no annuity is FDIC-insured.
    FDIC: FDIC insurance covers eligible bank deposits; annuities are not FDIC-insured deposits.

Sources and last verified

Last verified: September 15, 2026