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Looks like you'd have to move to said state first if you wanted to be covered by their law.
Looks like you'd have to move to said state first if you wanted to be covered by their law.
With the state of the financial industry in general it would be a good idea to look into the indicators of how stable your insurance company is.
Things are currently stacked where if we were to have a katrina type hurricane season companies writing home owners policies could be unable to pay the claims. You can thank the lack of regulation.
I did extensive research when we changed auto & home owners insurance to make sure this new company had a good track record of paying claims and was financially sound. The same thing could go for life insurance.
The other important thing to note is that usually those guarantor associations aren't really involved. Few insurance companies fail for over-writing term life insurance. If an insurance company fails, the life insurance portfolio is a valuable asset. It usually gets sold (at a discount) to another life insurer. They take over the policies.
Almost all life insurance companies use reinsurers. This means they are not liable for the full claim on a policy, unless there was blatant disregard for guidelines of issuing the policy. Between the reinsurers and the state regulators, it would be hard to fail as a life insurance company even if you tried.
If you look at AIG, the life insurance side of the business was extremely health. They had ample reserves and the ability to use reinsurers to pay part of any claims. AIG life insurance policy owners had as much chance of losing their coverage as a Metlife or Banner policy owner.
Is that picture from a real body? ::shutters::
So can you shop around for the best state to buy a policy in or is that verboten?
@I Love New Jersey: Seems your beloved New Jersey has one of the best guarantee coverages.