Would it be a bad idea right now to buy life insurance from AIG?

Question

I heard about the huge loss and downgrade.

Answer 1

Where did you hear about this loss? I worked for AIG in the Annuity Department and have friends that still work there and a few just told me last week that they just set a record for money brought in last quarter. Sorry I know this doesn't answer your question.

Answer 2

You buy insurance from companies that you hope will be around when you need them, and because of the price.  If the price is ok with you, then I would not worry about the company going anywhere.  They are a pretty big company and while I would not promise anything (ever, never use the word), I think that they would be here in years to come to pay out on a policy.  I work for a competitor, but I am being honest.

Answer 3

You run no real risk buying from AIG Life. The  life insurance business is insulated from what the parent corporation is doing as  a whole: Life insurance reserves are kept separate from corporate money. If AIG gets in serious financial trouble, they'd probably sell their life insurance division to someone at a profit. The company buying them would be required to honor any existing policies.

Answer 4

As long as a company is an admitted carrier in your state, then any policy you buy is guaranteed by your state insolvency fund, if a company goes bankrupt.

Having said that, AM Best's website seems to be down, but I'd be EXTREMELY surprised if AIG's financial strength rating is lower than an A.