Your Life Insurance Policy May Not Be Protected

Written by: Andrew Pia

Due to the toug economic times, many large life insurance companies are somewhat nervous that if their numbers do not improve in the next few quarters, their policies sold already could be in danger. Metlife, one of the largest life insurance companies, had unrealized losses of nearly $17 billion out of a portfolio of $324 billion in 2008.

Policies issued by life insurance companies like Metlife are backed by state guarentee associations, and at this point in time, many states have no cash on hand, and must rely on promises to pay to life insurers. Many policy holders are selling their life insurance policies back to the insurance companies before their maturation in order to pay off mortgages to save their homes. This presents a huge obstacle to these corporations and the local state governments, because these policies are not backed by the FDIC.

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