Cash Value in Universal Life Insurance?

[tennisWalt Super Moderator Find all posts View Profile Close tennisWalt]

Just how safe is the Cash Value in Universal Life Insurance? AIG failed and without a bail out would not be in business. Are there other Insurance Companies in trouble?

The way I understand Life Insurance, Cash Value in your policy is not guarantee by anyone. The only guarantee is the strength of the Insurance Company.

What happens to your Investment if your Insurance Company fails?

Walt

[billymach4 Super Moderator Find all posts View Profile Close billymach4]

Most states require Insurance companies to maintain sufficient reserves to pay all policies. If an Insurance company tanks I know NYS will step in and require the other companies HQ'd in the NY to pick up the failing companies policies. The Insurance industry as it pertains to Life, and Annuities is highly regulated, and audited by NYS.

AIG was a monster involved in Property, Casualty, Investment Banking, as well as Life, and Annuities. They were a public company as well that was forced to report quarterly earning to Wall Street.

You should look for a company that is a Mutual (Owned by the policyholders). New York Life is looking like a winner in this current storm. A mutual with over 14 billion in reserves, not exposed to the toxic credit crisis.

Watch this video by Ted Mathas the CEO of NYL.

New York Life Insurance Company - The Company You Keep