g Text Version
Beauty & Self
Books & Music
Food & Wine
Health & Fitness
Hobbies & Crafts
Home & Garden
News & Politics
Religion & Spirituality
Travel & Culture
TV & Movies

Bored? Games!
Take a Quiz
Rate My Photo

Natural Living
Folklore and Mythology
Distance Learning

All times in EST

Full Schedule
g Insurance Site

BellaOnline's Insurance Editor


AIG Top Questions

It has been a couple of weeks since insurance giant American International Group (AIG) was bailed out to the tune of $85 billion. If you are an AIG policyholder, chances are you still have questions/concerns about the company’s solvency, your policies, premiums etc.

Q: On the minds of AIG policyholders as well as insurance consumers in
general is what exactly does AIG’s $85 billion bailout mean?

A: In short, it means the government has control.

Q: What would have happened if the bailout had not occurred?

A: If AIG had not been bailed out, the company would have collapsed.
The ramifications would have not been limited to the United States. The
ramifications would have been worldwide. AIG does business in 130

Q: I have a life and/or health insurance policy or an annuity with AIG,
should I be concerned?

A: Please note that AIG has not filed for bankruptcy and they have not been
deemed insolvent.

Q: What will happen if AIG files for bankruptcy or they are deemed insolvent?

A: The insurance industry has protection mechanisms in place in the event an
insurance company files bankruptcy/becomes insolvent. This protection
mechanism is similar to FDIC for bank deposits.

Q: What exactly is the protection mechanism that the insurance industry has
in place?

A: Companies that write life, health and annuities are members of their State
Guaranty Association. The purpose of the Association is to protect the
policyholder in the event that a member (insurance company) becomes
insolvent (unable to meet financial obligations including pay claims) Each
state has a guaranty association. These associations are commonly referred
to as the Life and Health Guaranty Association.

Q: O.K. that’s fine for life, health and annuities, but I have a homeowner’s
or auto policy with AIG.

A: Each state has established a Property and Casualty (P&C) Guaranty
Association. The P&C Association essentially provides the same type of
protection that the Life and Health Guaranty Association provides.

Q: How does the process work if a company becomes insolvent?

A: Basically, the association assesses its other member insurance company’s
for the money to pay the claims of insured persons living in that
particular state.

Q: Will the association pay the full amount of my cash value?

A: The level of coverage may vary by state, but every state association
provides withdrawal and cash value coverage for annuities and life
insurance of at least $100,000. There are some states that offer up to
$300,000 and fewer offer up to $500,000.

Q: I think I have heard of this concept, is it the same thing as reinsurance?

A: No, reinsurance is when one insurance company indemnifies (backs) another
insurance company

Q: Is AIG going bankrupt?

A: AIG is financially solvent. Their assets are carefully monitored by the

Q: Is it a good idea to take the cash I have in my life insurance and/or
annuity and use it to buy the same type of policy with another company?

A: Deciding to surrender your life insurance and/or annuity is and should
always be a personal decision. If you decide to surrender your policies
be aware that certain policies may contain surrender charges. Before
finalizing your decision be sure to discuss the matter with your agent or
financial advisor.

Q: Should I still pay my AIG insurance premium?

A: In order for there to not be a gap in coverage if is imperative that you
pay your policy premium. Not paying your premium could result in the
termination of your policy.

Always review your policies once a year. If you have life changes notify your agent/broker/financial advisor to determine what impact those changes may have on your insurance policies. Life changes include: marriage, divorce, birth of a child, death of family member, new job, house or car, business venture.

Add AIG+Top+Questions to Twitter Add AIG+Top+Questions to Facebook Add AIG+Top+Questions to MySpace Add AIG+Top+Questions to Del.icio.us Digg AIG+Top+Questions Add AIG+Top+Questions to Yahoo My Web Add AIG+Top+Questions to Google Bookmarks Add AIG+Top+Questions to Stumbleupon Add AIG+Top+Questions to Reddit

RSS | Related Articles | Editor's Picks Articles | Top Ten Articles | Previous Features | Site Map

For FREE email updates, subscribe to the Insurance Newsletter

Past Issues

Printer Friendly
tell friend
Tell a Friend
Email Editor

Content copyright © 2015 by Denise M. Castille. All rights reserved.
This content was written by Denise M. Castille. If you wish to use this content in any manner, you need written permission. Contact Denise M. Castille for details.


g features
10 Things to Know About Buying Auto Insurance

The Policies You Need!

Details to Review About Your Insurance Policy

Archives | Site Map


Past Issues

Less than Monthly

BellaOnline on Facebook

| About BellaOnline | Privacy Policy | Advertising | Become an Editor |
Website copyright © 2016 Minerva WebWorks LLC. All rights reserved.

BellaOnline Editor