Life Insurance: what happens if a company goes bankrupt?

In all 50 states there are pools of money set up by the different insurance companies for just this eventuality. For example, in the State of Ohio life insurance/annuity policyholder is covered up to $100,000. I cannot speak for the other states, but I'm sure the coverage is equal or better. However, in every case I've ever seen a bankrupt life insurance company has been taken over by another company who then honors the contracts.

Sorry, but GEM is completely wrong.

AIG is in trouble for their home loans and not the insurance.

If AIG did go bankrupt in their insurance department the government would step in and take it over and find a buyer.

Nothing would happen to your insurance. Insurance companies also have insurance with the government that protects your insurance policies.

sit down decrease back and unfasten up my chum. the very actuality of the be counted is that coverage organizations do no longer bypass bankrupt in the conventional experience. they in basic terms get received by different insurers. appears like your dad ought to have had a hybrid coverage that has an funding area of it. The funding isn't doing nicely and is no longer masking the fee of preserving the coverage expenditures. not straight forward for me to signify further without seeing the coverage and so on. yet after all don't be in contact about the solvency of the coverage provider.

Well, AIG is now government owned, so it is ok for now.

What happens is your insurance is no longer any good and you would have to go and buy new insurance somewhere else.

This is why the AM Best rating given to insurance companies is so important when it comes to life & health insurance.

It didn't and nothing. Another company would buy the business and it would continue on. It's a revenue stream and it has a price tag.