Will I Lose My Life Insurance With AIG

I am scared to death that I will lose my money invested through this company. I am elderly and own $20,000 of this preferred stock. It would be a big blow to my daily living to lose this money. What is the likely hood of bankruptcy in this market? My broker says do not panic, but I am terrified.

They are supposed to be guaranteed for life.
If AIG stays in business and restructures and keeps American General, their life subsidiary, nothing can change. If they choose to sell off American General, their block of business will be sold to another company and by law all of the guarantees, price, death benefit, term length, etc have to remain intact.

Insurance companies are required by law to keep a reserve to cover future liabilities (which is what your life insurance policy is). If AIG were to declare bankruptcy, it would erase the liabilities AIG has, but not the liabilities of the outstanding policies. even in a liquidation, the outstanding life insurance policies would most likely be sold to another insurance company, as the revenue stream they represent is an asset.

The AIG life insurance, general insurance (including commercial) and retirement services are subsidiaries of the parent company, are adequately capitalized, regulated, and are not affected by the short-term liquidity problems we are hearing about. The move comes while the company still seeks help from the Federal Reserve, though the Fed is seen as having limited authority to help AIG, which is not regulated by the Fed.

It comes as the company’s stock plunges 52% and its debt trades at about 35 cents on the dollar as investors bail out of positions in the struggling insurance giant. All we know is that assets belonging to insurance subsidiaries owned by AIG are being raided to cover operating expenses. We sell American General life insurance (a subsidiary of AIG) and there have been lots of questions from policy holders.

There is no reason to believe American General’s life insurance policyholders are in danger at this time. It is always our client’s choice as to which carrier they would like to submit their application.

AIG is a company without leadership. They sure missed the boat in this crisis. They acted like they were sitting in a men’s club reading the newspapers. They won’t get the chance to announce their so called plan like Fuld did last week. They have already been graded F- by the market and now the rating agencies. AIG Retirement (AIG Valic) although owned by AIG is a strong separate company with its own reserves which can not be touched or raided by AIG. But this does not mean that Valic could not be sold. More than likely, the company will need to sell pieces of itself.

The oft-rumored target for sale is International Lease Finance Corp., an aircraft lessor owned by AIG, along with its personal lines businesses and annuities business No signs of that. Absent a sale, many competitors (who you are no doubt familiar with) will simply make their offers available to those who apply AND qualify for their terms (and pay their increased costs).

Most carriers view this as an opportunity to pick their spots and carefully underwrite and win new accounts rather than pay AIG for the business. Most consumers would probably be better off if AIG did ‘fail’ rather than pursue a system of survival through raiding of reserves. Because even if AIG were to go bankrupt this week, at least the reserves would still be there to pay any claims. This might not be the case if regulators keep allowing them to spend their reserves.

No death beneficiary in the history of the U.S. life insurance market has ever been denied or shorted on a legitimate death claim payout. If there is concern about the ability of ANY insurance company to pay claims, every State insurance commissioner has the authority to essentially merge the assets of any troubled insurer through a takeover by more solvent insurers. This method has been used successfully and repeatedly to prevent the default of even one payment of a death claim in over a hundred years in the United States and to make sure that every in-force policy is honored based on the original terms and conditions. Reserves are assets held by an insurance company to pay claims out of. They are not normally supposed to tap them for anything else.

What makes NY think they can approve the raiding of insurance company subs that are not domiciled in NY? The other state insurance regulators that are responsible for those subs will have an opinion about that. On the question about whether the life/annuity policies will be covered by the state insurance guaranty associations should any of the companies fail, the amount of coverage available varies by state, but is generally between $100,000 and $300,000.

All insurance company have guarantees to a certain amount of money which are paid for in case of bankruptcy. In most cases their portfolio of policies are usually taken over by another more solvent insurance company. Insurance companies have insurance themselves from the federal government. They are usually taken over by the government and then sold to another company. I had take a policy of TATA AIG Life insurance on dated 30-6-08, but i am not satisfied with teir services.& I had launch a complaint on 16-7-08 that i dont want any bond or something & I want to cancel the policy in freelookup period but they not processed my complaint & not refund my 3000 Rs.

I never heard another thing about the suit and cannot find any word of it. I purchased a life insurance policy from an agent who used untrue earnings potential to sell me his policy. The reason for life insurance is to cover final expenses and to take care of family members that are left behind. This is unfair and should be illegal. Companies like this should have to pay for what they inflict on families who are grieving and struggling financially.

What happens to AIG’s insurance policies?
Will we get claim from them or not? Today, they have got $85b loan from Federal reserve bank. Is it reliable to buy their insurance policies now?

India pays AIG for providing travel insurance worldwide for instance. I am not sure whether it affects those policies or not. In INDIA, AIG is tied up with TATA to provide life and general insurance.

NYT: Investors skittish about further losses in the financial industry have pounced on the American International Group, the beleaguered insurance company that has reported some of the biggest losses in the spreading credit crisis.

With Lehman Brothers running out of options this week, investors fear that A.I.G. will face billions in additional losses because it has effectively guaranteed complex financial instruments tied to home loans whose values have plummeted.

The mutual fund and variable account options change in value each business day. Retirement investments are long-term investments, and fluctuating values means that when redeemed, the investments can be worth more or less than its original cost.

This also means that client investment returns depend on the performance of the individual investments the client selected and not on the performance of AIG, or any of the AIG Retirement companies. Not sure what your question is exactly, but bear in mind that invested funds rely on the the health of the investments, not necessarily on the health of AIG.

Client assets in the mutual funds or variable annuity account options are invested in mutual funds regulated by the SEC. A mutual fund’s assets are owned by its shareholders and managed by a professional portfolio manager; thus, such funds are not affected by business actions involving AIG or AIG Retirement.

I was told months ago that our accounts were insured by my AIG advisor, she said that the fixed account was guaranteed.

Now with all the concern about AIG, I am wondering how claims will be paid out and by who in the event that AIG goes under.

For more information about AIG Protection Advantage VUL, call 1-877-TEAM-VUL to speak with a VUL marketing specialist, or visit www.aigag.com.

AIG does not underwrite any insurance policy referred to in this release. AIG Protection Advantage VUL Policy Form Number 07921 issued by American General Life Insurance Company a member company of American International Group, Inc. (AIG) Houston, Texas. The underwriting risks, financial obligations and support functions associated with the products issued by American General Life Insurance Company (American General Life) are its responsibility.

American General Life is responsible for its own financial condition and contractual obligations. Variable universal life insurance policies issued by American General Life are distributed by American General Equity Services Corporation, member FINRA and a member company of American International Group, Inc.