What, if any, protection can be expected with annuities?

When making such investment decisions, you should be able to ask the investment company whether the account comes under FDIC protection.

Q. In April 2008, I rolled over my 457 group single annuity deferred certificate (IRA annuity). I am aware that 457s are insured by the FDIC up to $250,000. Is the annuity covered by any similar insurance? Where can I find out?

Ed Salem, Burlington

A. In these uncertain times, with volatile financial markets and struggling banks, trying to seek as much protection as possible is a reasonable approach. There are certainly quite a few options that are covered by federal insurance.

You are correct that certificates of deposit that are part of a 457 retirement account - typically available to government workers - are insured by the Federal Deposit Insurance Corp. The $250,000 limit for those accounts was set before the recent temporary change that boosted federal insurance for bank accounts from $100,000 to $250,000 through the end of 2009. Likewise, money in individual retirement accounts and 401(k) plans also are covered by the FDIC, as long as the money is at an FDIC-insured institution.

But annuities fall into the same category as securities. They, like stocks and mutual funds, are not covered by the FDIC.

When making such investment decisions, you should be able to ask the investment company whether the account comes under FDIC protection. The FDIC's website, www.fdic.gov, has a lot of helpful information. And the Massachusetts secretary of state's offers a brochure with tips to consider when buying an annuity. The tips are largely focused on trying to ensure the purchaser doesn't get ripped off and helping filter different terms that could be included in an annuity. You can find the brochure on the secretary of state's website: www.sec.state.ma.us.

Additionally, the Securities Investor Protection Corp. exists to help those who have money and investments with a brokerage that fails. Those who have accounts with an SIPC member brokerage that goes under can have their holdings replaced - up to $500,000 in investments and up to $100,000 cash. SIPC backing, however, does not protect investors from fraud or a worthless investment.

HAVE A CONSUMER QUESTION? E-mail your questions to consumer@globe.com.