Saving You Money For Life

Each week, I get a call from a client asking me if their term life insurance policy is going to payout should they die.  And, the recent news about the possibility of tapping into the TARP funds have rattled even more nerves.

The answer is your policy is safe.  Each state imposes a stringent financial-reporting requirements on life insurers to counterbalance liabilities and obligations with reserves. In addition, the states will take charge of an insurer that’s on the brink of insolvency, generally selling it to a stronger company that takes over policies. If liquidation should occur — and since 1983 only about 60 life- and health-insurance companies have gone broke, according to A.M. Best — policy holders are paid before vendors. If that falls short, state guaranty funds are in place to cover shortfalls.

Tags: AccuQuote

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