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Originally Posted by Aces4
Thank you for that succinct explanation. The difference between the federal government and the state insuring money is that one can print the money to cover the losses. History has proven that to be true.
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Dear Aces4-
You are correct that the Feds can print money and the states cannot.
As I mentioned, in the event of a total financial collapse. since insurance companies invest in stocks, bonds, and real estate, none of those assets are likely to go to zero and those holding annuities will receive some money back.
In the case of FDIC with multiple banks going under, the Feds can "bail out" depositors by printing worthless currency. It has been suggested, however, that the more likely scenario is a "buy in" whereby depositors are given stock in the bank that went under.