If the insurance company goes bankruptcy, even thought the chance is rare, you will only get up to 300K for compensation depends on the state you live. Why life insurance agent didn’t tell you the whole risk?
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Because it’s rare. Extremely rare. It’s much more likely that a failing company would have their book of business purchased by another.
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If you put millions of fund in one company, it would be very risky.
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And that’s why picking the right company is important, especially if you’re spending millions
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It’s very rare. With the involvement of federal, state, and local agencies, the chances of the backup law in your state being applied (300k) are extremely low.
An insurance carrier’s reputation is critical. Any hint of trouble, and agents will stop writing policies for them immediately.
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I don’t think you’re correct. Life insurance compensation isn’t capped in any of the states where I’m licensed. However, annuity compensation is. So, be cautious when purchasing annuities.
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Insurance companies are heavily regulated. In Canada, they must maintain enough capital to cover their liabilities. If they don’t meet these requirements, the regulator can take over. While many things could happen, there are regular checks to make sure they don’t.
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It’s better to select different insurance companies for multi million investment just in case. My agent always misled us, so annoying.
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