What is General Account?
The general account is the main investment pool of an insurance company, and it is where the premiums for fixed annuities are invested. Your guaranteed rate and principal are promises paid out of that pool, so the insurer’s financial strength stands behind them.
Which annuities are backed by the general account?
Every annuity with a guaranteed rate or a guaranteed income payment is backed by the insurer’s general account. Variable annuities are the main exception, because their subaccounts sit in a separate account.
- Backed by the general account. Fixed annuities, MYGAs, fixed index annuities and income annuities such as SPIAs and deferred income annuities.
- Held in a separate account. The subaccounts of a variable annuity, which rise and fall with the market.
- A mix of both. Guaranteed riders on variable annuities and the downside protection on a RILA still depend on the insurer’s claims-paying ability.
What is in an insurer’s general account?
Life insurers invest general account money mostly in high-quality bonds, because the payouts they owe are fixed dollar amounts. Here is the industry picture at the end of 2024.
| Industry figure, year-end 2024 | Amount |
|---|---|
| Total general account assets | $6 trillion |
| Bonds held in general accounts | $3.8 trillion |
| General account bonds rated investment grade | 95% |
| General account bonds in or near default | 0.1% |
| Insurer mortgages in good standing | 98.5% |
| Total separate account assets, for comparison | $3.3 trillion |
Source: American Council of Life Insurers, Life Insurers Fact Book 2025, Chapter 2.
Stocks play a small role. ACLI reports that 94% of the stock life insurers own sits in separate accounts, not in general accounts backing fixed guarantees.
General account vs. separate account
| Feature | General account | Separate account |
|---|---|---|
| Who bears investment risk | The insurance company | You, the contract owner |
| What it backs | Fixed rates, floors and guaranteed income | Market-based subaccount values |
| Typical investments | Investment-grade bonds and mortgages | Stock and bond funds you choose |
| If the insurer fails | Policyholder claims rank ahead of general creditors, plus state guaranty association coverage | Insulated assets are legally walled off from the insurer’s creditors |
| Products | Fixed, MYGA, fixed index and income annuities | Variable annuities and variable life insurance |
The NAIC explains that each separate account product is filed as either insulated or not insulated from general account creditors. Ask the carrier which applies to a contract you are considering.
How the general account sets your rate
- The insurer invests your premium. It goes into the general account, mostly into bonds held to maturity.
- It credits you part of the return. That becomes your credited rate.
- It keeps the difference. The gap between what the insurer earns and what it credits is called the spread, and it is how fixed annuities make money for the carrier.
This is why fixed annuity rates follow bond yields. When rates on new bonds rise, carriers can offer higher guaranteed rates on new contracts.
Compare today’s fixed annuity rates
What protects your money in the general account?
- The insurer’s financial strength. Your guarantee is only as strong as the company behind it, so check its AM Best and other financial strength ratings before you buy.
- State reserve rules. Regulators require insurers to hold reserves against what they owe policyholders and examine them regularly.
- The state guaranty association. If an insurer fails, most states cover up to $250,000 in present value of annuity benefits per person, and a few set higher limits. See the limit for your state on our state guaranty associations page.
Guaranty limits come from each state’s law; the ACLI guaranty association FAQ explains how coverage works.
Frequently Asked Questions
What is a general account?
The general account is an insurance company’s main investment pool. It holds the premiums for fixed annuities and backs every guaranteed rate and guaranteed payment the company owes.
Which type of annuity is backed by the insurer’s general account?
Fixed annuities, MYGAs, fixed index annuities and income annuities are backed by the general account. Variable annuity subaccounts are held in a separate account instead.
What is the difference between a general account and a separate account?
In the general account, the insurer owns the assets and bears the investment risk. In a separate account, the assets are tied to your chosen investments and you bear the investment risk.
Is money in the general account safe?
It is backed by the insurer’s claims-paying ability, and 95% of general account bonds were investment grade at the end of 2024. If the insurer fails, your state’s guaranty association provides additional coverage up to its limit, which is $250,000 of annuity value in most states.
What does an insurer invest the general account in?
Mostly investment-grade corporate and government bonds, plus commercial mortgages. Bonds made up about $3.8 trillion of the industry’s $6 trillion in general account assets at the end of 2024.
