I just found the answer to my question, and wanted to share it with everyone.
My question regarding banks having their own insurance (FDIC), what reassurance do we have that in paying our monthly premiums that the Insurance Company will pay the death benefit to survivors/beneficiaries--what if they go out of business?
Well, instead of the FDIC, there is the "State Guaranty Associations" that guarantee your life and health insurance, up to a maximum amount, determined by state.
"State guaranty associations play a vital role in keeping the promises made by the insurance industry and protecting policyholders when their company goes out of business."
"How have they done it? The associations created NOLHGA to help them protect policyholders more efficiently."
From the National Organization of Life & Health Insurance Guaranty Association (NOLHGA)
http://www.nolhga.com/policyholderinfo/main.cfm/location/systemworks
"Much like the FDIC’s coverage of the banking industry, state guaranty associations provide benefits up to a specified limit. For the associations, these limits are spelled out in state law. While the laws that govern maximum benefits available and types of policies covered may vary somewhat from state to state, most states provide at least:
* $300,000 in life insurance death benefits
* $100,000 in cash surrender or withdrawal value for life insurance
* $100,000 in withdrawal and cash values for annuities
* $100,000 in health insurance policy benefits"
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I just found the answer to my question, and wanted to share it with everyone.
My question regarding banks having their own insurance (FDIC), what reassurance do we have that in paying our monthly premiums that the Insurance Company will pay the death benefit to survivors/beneficiaries--what if they go out of business?
Well, instead of the FDIC, there is the "State Guaranty Associations" that guarantee your life and health insurance, up to a maximum amount, determined by state.
"State guaranty associations play a vital role in keeping the promises made by the insurance industry and protecting policyholders when their company goes out of business."
"How have they done it? The associations created NOLHGA to help them protect policyholders more efficiently."
From the National Organization of Life & Health Insurance Guaranty Association (NOLHGA)
http://www.nolhga.com/policyholderinfo/main.cfm/location/systemworks
"Much like the FDIC’s coverage of the banking industry, state guaranty associations provide benefits up to a specified limit. For the associations, these limits are spelled out in state law. While the laws that govern maximum benefits available and types of policies covered may vary somewhat from state to state, most states provide at least:
* $300,000 in life insurance death benefits
* $100,000 in cash surrender or withdrawal value for life insurance
* $100,000 in withdrawal and cash values for annuities
* $100,000 in health insurance policy benefits"
Interesting! I never knew this!
January 10, 2009 - 8:04pmThis Comment
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