Assumptions: Salary reductions only. Fixed interest annuity.

Does the amount borrowed come from the general assets of the insurer or the individual's annuity account balance?

On a fixed annuity (in contrast to a variable annuity), there is no distinction between the two. When a policyowner pays a premium, it becomes part of the general assets of the insurance company and is invested as such. Thus, a loan is also part of the general assets of the company.

Of course, separate accounting is maintained in order to determine the policyowner's account balance, loan balance, etc., but each policyowner's balance is not identified to a specific investment.