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State insurance guaranty associations provide additional protection that reduces the risk of annuity insolvency when premiums fall below a fixed threshold. Multi-year guaranteed annuities (MYGAs), also known as fixed-deferred annuities, offer investors a guaranteed return comparable to corporate bond yields, with the added benefit of insolvency risk protection. Informed investors should select lower-quality, higher-return MYGAs at or near the state guaranty threshold using nonqualified assets to maximize after-tax return and take advantage of downside protections. Using sales data from an online annuity provider, we find no evidence of strategic annuity selection. Sophisticated investors do not appear to take advantage of opportunities to earn higher returns below protection thresholds during periods of market turbulence when spreads between higher- and lower-quality insurers widen. Rules that shroud state guaranty protection appear to limit strategic purchases by sophisticated investors, potentially misallocating capital toward lower-rated insurers, while also protecting vulnerable consumers who appear to ignore insurer solvency ratings.