The insurance contracts also depend on the strength of the underlying insurer. Prudential holds an a- long-term rating from A.M. Best Co., which rates the financial strength of insurers. JPMorgan is not rated by A.M. Best and has an Aa3 long-term rating from Moody's Investors Service and an A+ rating from S&P.
Rising Rates
Even though the funds generally invest in longer-dated debt than money-market funds, they could lag behind money funds' yields if interest rates rise rapidly because they generally take longer to adjust to rate changes, Caswell said.
"Right or wrong, there are plenty of disclosures that participants receive that nothing is guaranteed," with stable- value funds, said Jon Upham, principal of Irvine, California-based SageView Advisory Group, a consultant to plan sponsors.
"From a practical standpoint, participants think that if they put their money in a money-market fund or a stable-value fund, they think it is guaranteed," he said.