Monday, February 2, 2009

How Risky is Life Insurance?

Posted by Allison Franklin

The Risks of Life Insurance

Anxiety About Industry Complicates Consumer Choices

By David S. Hilzenrath and Nancy TrejosWashington Post Staff Writers Sunday, February 1, 2009; Page F01

It was a head-spinning week for anyone with a life insurance policy.
First, the industry lobby argued that some insurers are in such dire shape that they need immediate relief from requirements meant to keep them solvent. Then, when regulators denied the relief, the industry lobby was quick to issue a more soothing message: Don't worry, there is plenty of money to pay claims.

The mixed messages may have left you hoping you never need life insurance. But if you already have a policy or need to buy one to protect your spouse and children, how nervous should you be?

The hard truth is . . . it's hard to know.

But we do know this: there's a safety net that could protect you if your insurer fails. However, there are limits to the benefits it covers, and the safety net has distinct vulnerabilities of its own.
If this doesn't comfort you, beware that dumping your policy could have serious consequences. For example, depending on your age and health, you might have trouble replacing it, or you could end up paying much more for a new policy.

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1 comment:

  1. Thanks for sharing your experience. I am surprised and worried too after reading your post. I think I should talk to my agent and will discuss some points that I have learnt from your post to clear out all my doubts.