Is It Safe? AIG Crisis Could Affect Annuities

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As American International Group (AIG Quote) fights to stem billions of dollars in losses and survive the worst economic decline since the Great Depression, investors should think hard before buying the insurance company's annuities.

The government, viewing AIG as too important to fail, has committed more than $200 billion to prop up the ailing company, which lost a record $61.7 billion in the fourth quarter. AIG has worked hard to reassure worried consumers, reminding them that its insurance subsidiaries are "well capitalized." The National Association of Insurance Commissioners even offers a resource page on its Web site to let consumers know that AIG annuities are safe, even if the company becomes insolvent.

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