Should I worry about my life insurance through AIG?

[Denise L]

I read today that AIG is in financial trouble.

http://money.cnn.com/2008/09/15/news/companies/AIG/index.htm?cnn=yes

I'm wondering what happens to life insurance policies if the company goes out of business. Does anyone know if insured folks like me would have any recourse for annual premiums or anything like coverage through another company?!

 

[pcgirl54]

We just applied last week-wondering the same thing. They are one of the largest insurers.

 

[Liz Wolf-Spada]

Do you have anyone who would know this? I wouldn't trust a word AIG tells you right now. IndieMac said they were fine the day before declaring bankruptcy.
Liz

 

[dwsupt]

All financial products

I'm worried about my 403b annuity. Most States guarantee insurance but I guess thats only if you die while they look for a buyer.

 

[silvib]

We, too, have life insurance with AIG. They've been trying for ages to get us to change our policy which would have meant an immediate higher premium for coverage that takes us beyond our contracted term, but we said no. I'm pleased we didn't.
Definitely keeping a sharp eye as we don't want to suddenly find ourselves without coverage.

 

[AwayWeGo]

So Long, A. I. G. Hello, John Hancock.

Last year my broker got me to dump AIG & move my variable annuity over to John Hancock.

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[Dave M]

It's likely that your insurance, for the most part, is safe. Here are a few excerpts from a Wall Street Journal article written last night in response to the AIG situation:

"AIG's subsidiaries, such as AIG American General, one of the country's leading insurers, appeared to have adequate financial reserves and should be able to pay claims from people who hold its annuities, homeowner, commercial and life-insurance policies."

Moreover, the insurance industry and its regulators long have had rules in place to protect investors. State guaranty associations exist to pay claims in the event that insurance companies fail. The associations are in all states and are funded by insurers in each state."

....

"When an insurer does fail, if the company is short of funds to cover claims, guaranty funds step in to cover claims either within policy limits or limits set by state laws."

....

"For life-insurance policies and annuity contracts, death benefits generally are guaranteed up to $300,000; $100,000 for cash surrender or withdrawal value of life insurance, $100,000 for withdrawal and cash value of annuities and $100,000 for health-insurance benefits, according to the National Organization of Life & Health Insurance Guaranty Associations in Herndon, Va."

....


"Liquidation is a last resort. ... Outstanding claims are paid from the states' guaranty funds, and beneficiaries are the first to be paid.

Owners of life, health or annuity policies are given the opportunity to have their insurance policies assumed by a carrier in good financial health, according to the life and health guaranty group."

 

[Timeshare Von]

Not any more - - the US Government just bailed them out!

 

[Denise L]

Not any more - - the US Government just bailed them out!

I just read that on CNN! Now I'm reading as to why AIG and not Lehman ...
$85 billion is ton of money for the Fed to "loan."

 

[Tia]

It is down right scary imho.