What happens to my policy if my life insurance company becomes insolvent?
What happens to my policy if my life insurance company becomes insolvent? Latinos feel eternal. We don’t like to talk about the ending. We prefer to live life to the fullest and if the unspeakable arrives, “take the dance away from us”. Although we have just made a simplification through a stereotype, it is true that we are not very inclined to think about death.
Therefore, despite death being an inevitable event, it is difficult for us to call an insurance company and acquire any type of life insurance. We make all the possible excuses, “I’m young”, “I’m healthy”, “don’t talk to me about death”, or “I spend my whole life paying, and what happens to my money, if the company goes to hell? ”.
We want to talk about this last concern today. It is very logical, since life insurance is one of the few insurance contracts that is not renewed annually, some are contracted for life or for a long period. And as the saying goes, “the future is uncertain”.
Well, to that Latino who finally decided to have insurance to protect his family financially, if he dies, we tell him that his money is safe.
If an insurance company becomes insolvent, the State Guaranty Association and the Guarantee Fund are responsible for protecting affected customers.
The Guaranty Association will be in charge of transferring the policies of the insolvent insurer to another insurance company or will continue to provide coverage to the insured itself.
To be totally transparent, the States of the country -the Guarantee Association is backed by the state- have a limit on the amount to be disbursed to injured clients. In the case of life insurance death benefits, it is around $300,000.
To avoid signing your contract with a company with a bad reputation, it is best to verify its financial strength.
There are different independent agencies, such as Standard & Poor’s or Moody’s, which are dedicated to rating them with scales ranging from “A” to “D”, triple “AAA” being the most reliable.
Talk to a specialized Univista Insurance agent and ask about it. What happens to my policy if my life insurance company becomes insolvent?