estate planning

How Safe is Your Insurance Policy?

How often do you track your stock portfolio? Daily? Monthly? Or, have you stopped looking altogether? Now, how often do you track your insurance portfolio? If you have purchased life insurance in the past, you may have checked the ratings for your insurer at the time of purchase. However, ratings change and if you do not monitor the health of your insurer, you may end up disappointed should your insurer collapse.

The Florida Insurance Law Blog highlighted this issue recently when one of their attorneys learned that the Virginia Department of Insurance had placed Shenandoah Life, the insurance company from which he had purchased a Universal Life insurance policy, under receivership.

A.M. Best rates the credit of insurance companies. You can review their ratings of insurance companies with a free registration. For the insurer in question, A.M. Best had downgraded their financial strength rating from A- (Excellent) to B++ (Good) on September 26, 2008. Two months later, A.M. Best placed their rating under review pending a proposed merger between OneAmerica and Shenandoah Life. The day after OneAmerica terminated its letter of intent concerning the proposed merger, the State Corporation Commission of Virginia was appointed as a receiver for Shenandoah Life.

To avoid getting surprised, visit the Best’s Ratings & Analysis Center to see the state of your insurer.

4 replies on “How Safe is Your Insurance Policy?”

In this uncertain time, you need to constantly check your insurance’s status. With several companies closing or declaring bankruptcy, you may want to update your self with the condition of your policy.

If there is the best time to examine your insurance policy then now is the right time. If you are planning to secure one then double check the company’s financial condition.

Choose an insurance company that has been proven its worth throughout the years. Ask around before buying one. You may want to give your hard earned money to a company that you can trust and that would live to your expectations.

As it turns out, financial services companies that have proven their worth throughout the years are ending belly up, some because of fraud and others because of the catastrophically bad investment climate even for those holding presumably safe and conservative investments.

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