by helpyouguys » Mon Jul 19, 2010 03:49 pm
Ever think to yourself that maybe you should get affordable life insurance, but haven't actually yet jumped on that thought and made it happen? A lot of people have considered doing the same. Some have actually tried it. Most others have gotten bogged down with the negatives somewhere and never started.
Hmm. Are they really valid reasons? Did they really consider the positive side? Did we look at the "pro" side or simply the "con" side? Before we let the negatives rule, the positives deserve a reasonable hearing. Let's look at 5 reasons for you to get affordable life insurance sorted out right now, and stop delaying any longer, or procrastinating when actually getting the situation satisfactorily resolved is much easier then you might think.
Lets take a look at those reasons in turn...
1. First, you will be doing your best for your family in an extremely tangible manner, and will no longer be faced with the thought of what will happen to them if you aren't about to take care of them. Sure, I am aware of your objection that you will have to spend out money on this, that times are tough, budgets are tough, and that this is an expense that you could well do without. Yes, this is a valid observation, but look at it this way, If you don't get this sorted out then you will be faced with the prospect of having your family go uncovered and not being able to pay the bills. Not a nice thought. In addition, consider that it is actually much cheaper then you might realise to get this sorted out. And it becomes clear that this isn't a good reason not to act
2. Second, that whilst you may think of life insurance as a luxury, in reality it isn't, and you need to get it just as readily as you would pay for your gas bill. It is simply a normal expense that has to be paid. The primary reason for that could be that you need a slight mindshift in the way you look at life insurance. But nevertheless, you should bear this in mind. Plus it isn't as hard to sort out as you have been told
3. Third, once it has been sorted out then you can forget all about it, and get on with the business of life. And in addition its nice to know that you have done your part in securing the future of your family!
4. Fourth, the range of insurance policies that are available is now much wider, and so you can get whole life insurance, term life insurance or many others. So you can really get one that is tailor made to your circumstances.
5. And Fifth, you can then move onto something more important once you have arranged it. You can get the affordable life insurance cover in under 10 minutes, so it is hardly an arduous process!
Within all of the above info lies a very good group of reasons in favor of getting affordable term life insurance sooner rather than later.
If you look at all the reasons and evaluate them, you will have to admit that a very compelling case can be made for beginning to consider how you can get this particular aspect of your financial affairs arranged, and not have to unduly dwell on it.
Just consider it. Maybe, just maybe, you really, in all seriousness, should get onto the internet right now and at the very least see the wide range of policies that are available, and how they could potentially do a good job of protecting your loved ones.
Hmm. Are they really valid reasons? Did they really consider the positive side? Did we look at the "pro" side or simply the "con" side? Before we let the negatives rule, the positives deserve a reasonable hearing. Let's look at 5 reasons for you to get affordable life insurance sorted out right now, and stop delaying any longer, or procrastinating when actually getting the situation satisfactorily resolved is much easier then you might think.
Lets take a look at those reasons in turn...
1. First, you will be doing your best for your family in an extremely tangible manner, and will no longer be faced with the thought of what will happen to them if you aren't about to take care of them. Sure, I am aware of your objection that you will have to spend out money on this, that times are tough, budgets are tough, and that this is an expense that you could well do without. Yes, this is a valid observation, but look at it this way, If you don't get this sorted out then you will be faced with the prospect of having your family go uncovered and not being able to pay the bills. Not a nice thought. In addition, consider that it is actually much cheaper then you might realise to get this sorted out. And it becomes clear that this isn't a good reason not to act
2. Second, that whilst you may think of life insurance as a luxury, in reality it isn't, and you need to get it just as readily as you would pay for your gas bill. It is simply a normal expense that has to be paid. The primary reason for that could be that you need a slight mindshift in the way you look at life insurance. But nevertheless, you should bear this in mind. Plus it isn't as hard to sort out as you have been told
3. Third, once it has been sorted out then you can forget all about it, and get on with the business of life. And in addition its nice to know that you have done your part in securing the future of your family!
4. Fourth, the range of insurance policies that are available is now much wider, and so you can get whole life insurance, term life insurance or many others. So you can really get one that is tailor made to your circumstances.
5. And Fifth, you can then move onto something more important once you have arranged it. You can get the affordable life insurance cover in under 10 minutes, so it is hardly an arduous process!
Within all of the above info lies a very good group of reasons in favor of getting affordable term life insurance sooner rather than later.
If you look at all the reasons and evaluate them, you will have to admit that a very compelling case can be made for beginning to consider how you can get this particular aspect of your financial affairs arranged, and not have to unduly dwell on it.
Just consider it. Maybe, just maybe, you really, in all seriousness, should get onto the internet right now and at the very least see the wide range of policies that are available, and how they could potentially do a good job of protecting your loved ones.
Posted: Sat Nov 20, 2010 01:26 am Post Subject:
Max, that's a great link with ilhiga.
As I read it, it makes me thing that all death claims were paid 100% with Excutive Life. The reason why I'm saying this is that all of the policies were transferred to Aurora Life. Why would Aurora Life do this? They are getting payments from the state Guaranty Associations. The Guaranty Associations didn't pay the policy holders. From a policy owner point of view, the policies stayed in force with a different carrier.
Again, I can be wrong, but I see nothing indicating that any Executive Life life insurance policy holder didn't have a death claim paid at 100%.
Posted: Sat Nov 20, 2010 04:27 pm Post Subject:
Total liabilities= $6,000,000
Maximum exposure of state guaranty association $4,500,000.
Insureds could possibly be out $1,500,000
What's missing? The assets of the insurer. There could easily be enough assets to cover the death claims.
You miss one vital point. The insurance company would not be insolvent if they had the assets to cover their liabilities. When the statement is made that there are $6,000,000 in liabilities, it means that's what's left AFTER whatever assets were accounted for. The exposure of the guarantee association is the statutory limit of its liability. They will not cover the whole $6,000,000.
As I read it, it makes me thing that all death claims were paid 100% with Excutive Life. The reason why I'm saying this is that all of the policies were transferred to Aurora Life.
This is a misreading of the reality. Death claims in process, and death claims following the conservation of the insurance company BEFORE any active policies are sold to another insurance company do not become the liability of the new insurance company. Only the active policies do (ones that cover persons who are not dead yet).
There are plenty of people whose Executive Life death benefits were never paid at 100%. Some of them are still receiving money as the various guarantee associations all continue to contribute toward the eventual payment of claims as part of the plan that was worked out years ago.
I'm sorry this is such a hard thing for some to understand.
I also believe that confidence in the industry is of critical importance and if people had doubts about death claims being paid, it would cripple the industry.
You're entirely correct. The fact that the number of insurance company failures is far exceeded by the number of bank failures each year (in good times and in bad) is testimony to the strength and solid foundation upon which all insurance is built. There is far more regulatory oversight of the insurance industry than the banking industry.
But when things are deliberately hidden from the regulators through false financial statements, it can take longer to uncover the misdeeds, and by the time they are discovered, it may be too late to safely rescue the victims. That's why we have the guaranty associations. Not a perfect solution, but it prevents total disaster from striking at the worst possible moment -- death of an insured at the same time their insurance company dies.
Posted: Sat Nov 20, 2010 05:46 pm Post Subject:
Max, have you noticed that you still haven't been able to point to an article or anything showing any information about a life insurance death claim not being able to be paid at 100%. I sure haven't been able to find anything.
You are forgetting that an insurance company will become insolvent BEFORE they aren't able to pay their death claims. They have other liabilities other than the death claims, but the claims take precedence. Also, they can be taken over because they no longer have enough in reserves.
That's fine that the new company isn't handling the death claims that took place from the period of time shortly before the company failed until they took over. The point here is that an insurance company is going to be taken over far before the point that they only have the assets to pay a few months of claims. It's hard to believe that Executive Life didn't have the money to pay this handful of claims.
Max, understand that this isn't me simply doubting your word. Rather, it is a failure on both of our parts to be able to point to anything concrete that shows that Executive Life's death benefits were paid or weren't paid at 100%.
I don't expect you to believe me that they were paid at 100% because I haven't found anything to back up my belief. Yet, you shouldn't be currently be believing that they weren't.
As best as I can tell, the Guaranty Associations did not pay any Executive Life policy holder death claims. They paid lots of money to Auroa Life, but I can't find any evidence of them paying anything direct to a beneficiary. Without the Guaranty Association making a direct payment, there isn't any reason to think that the claims weren't paid, unless we have evidence showing this.
Posted: Sun Nov 21, 2010 06:40 am Post Subject:
I'm about through trying to explain the reality of your fantasy. So I'm going to post links to articles about Executive Life that all indicate that due to the enormous discrepancy between assets and liabilities that claims were being handled by the Guaranty Associations according to their statutory limits. Which, for may people would mean receiving LESS THAN THE POLICY VALUE or DEATH BENEFIT FACE AMOUNT.
http://money.cnn.com/magazines/fortune/fortune_archive/1991/05/06/74977/index.htm
You do the reading, and let's see what happens. Take note of the plight of Charles R. Wallace of Chicago, who was not dead, but was receiving annuity benefits (analogous to a death claim) and stood to lose most of $13,000,000 of future annuity benefits. That he did not/won't has nothing to do with insurance companies or guarantee associations, as you will read.
http://www.gpo.gov/fdsys/pkg/CHRG-107hhrg83976/pdf/CHRG-107hhrg83976.pdf
This is the transcript of the Congressional Committee on Government Reform hearing on October 10, 2002, into the failure of Executive Life and its resulting effects on policyholders. It is 277 pages long. I don't expect you to read every page (most of it is pretty boring stuff, like much of what Congress does). But if you just read the opening remarks of the Chairman, Rep. Dan Burton (R-IN), on p. 2 (references are to the actual numbered pages -- you have to add 4 to the PDF page count to find the right place) you will see these four paragraphs:
Before 1991, Executive Life was one of the country’s largest insurers, with more than 300,000 policyholders and $10.5 billion in assets. Executive Life had most of its investments in high-risk,high-yield junk bonds. With the collapse of the junk bond market in the early 1990’s, Executive Life became insolvent.
(emphasis added)Afraid of a run on the company by policyholders, the Insurance Commissioner seized Executive Life and put it up for auction. In late 1991, the Insurance Commissioner accepted a bid for Executive Life that would separate the insurance business from its portfolio of junk bonds. This separation left the insurance business without a strong asset base, forcing benefits to be severely reduced.
The Executive Life debacle resulted in losses to its policyholders. State insurance guarantee funds made up part of the losses, but coverage was capped. Of the 300,000 policyholders impacted by the sale, approximately 5,000 reside in my home State of Indiana. The taxpayers of Indiana have spent $26.8 million to cover the losses by the policyholders. There is also an estimated $10.3 million to be spent in Indiana in the future.
California has approximately 180,000 policyholders. In California the State guarantees annuities up to $100,000 and life insurance up to $300,000. Annuitants and recipients of structured settlements in excess of State guarantees suffered great economic losses, and these are the people who can least afford it.
The $300,000 in the last paragraph is really only $250,000, up to 80% of policy face, but the other amounts are the correct. When the Congressman said 'The Executive Life debacle resulted in losses to its policyholders." that included death claims right alongside the annuities. They don't get different treatment (other than the larger amount paid to life insurance death claim beneficiaries).
On p. 3, Chm. Burton added:
We have learned that these people did not need to suffer like this. We have learned that an affiliate of Executive Life, Executive Life of New York, went through similar problems. However, the policyholders of Executive Life of New York were made whole.
So how can there be such a dramatic difference in outcome for these two companies? Mr. James P. Corcoran, the former New York Insurance Commissioner, is here to explain how he accomplished this.
What Corcoran told the Committee, see p. 47, was that his early oversight of junk bond holdings and NY's decision to limit junk bond holdings to 20% (ELNY had gotten up to as much as 64%) prevented the huge losses experienced by ELIC). They didn't quite get there before the ELIC fiasco brought them down, but the exposure was low enough that MetLife agreed to acquire the assets, and the policies and other liabilities, and no one in NY lost anything. But that was only one state out of 50, plus DC, Puerto Rico, Guam, and the other territories.
On pp. 6-7 is an April, 2002 article from the Los Angeles Times that tells part of the bigger story leading to the Hearing.
If you cannot accept this as proof of the fact that death claims have on more than one occasion NOT BEEN PAID IN FULL, then there is no hope for you at all. Until you find one of the hundreds of ELIC beneficiaries who received less than 100% of their policy proceeds. There are plenty of annuitants (equivalent to life beneficiaries) who were forced to accept 30% or greater reductions in their annuity benefits -- most are still alive today. Why them and not life beneficiaries?
That's exactly the point at which your fantasy evaporates.
But, in case you are still not convinced, here are a few more earlier articles that tell some of the same tales. After reading them, you are free to persist in your fantasy. I just hope you never have to find out how wrong you are through actual experience.
These are all a dose of reality, whether you can grasp it or not.
http://articles.latimes.com/1991-05-17/news/mn-1874_1_executive-life
http://www.cato.org/pubs/regulation/regv15n2/reg15n2a.html
http://www.caclo.org/perl/index.pl?document_id=4c6951ac85550a083ba98ebf80668c27 (here, you can view at least 47 other documents about ELIC and its failure)
So, please give up! Surrender to the truth. When an insurance company is insolvent and the claims fall on the state Guaranty Associations, they are paid according to state law, and not necessarily according to the insurance contract.
Perhaps the part that is confusing you is the whole business of liquidating an insurance company. That is not done by the Guaranty Association. It is done by the Insurance Commissioner (in CA we have a Conservation and Liquidation Office within the Dept of Insurance to handle the matters).
Whatever they can collect on behalf of policyholders and claims is paid to the Guarantee Association (or in the case of the ELIC opt-out policyholders, to a special trust that is still reimbursing those folks, but they have never been "made whole", and are unlikely to ever be made whole) to cover statutory claims, and if it is not enough to do even that, as was the case with Executive Life, all other insurance companies have to kick in an extra assessment to help cover for their "deceased" brethren.
So at this point, I'm about done, too. I have roasted, toasted, and cooked this piece of meat way beyond well-done. You are now chewing on burnt cinders when you could have stopped at the tender truth when it was first reveled to you a long time ago.
Tell us, will the dream continue, or will you wake up and come to your senses?
Posted: Sun Nov 21, 2010 09:46 am Post Subject:
There are plenty of annuitants (equivalent to life beneficiaries) who were forced to accept 30% or greater reductions in their annuity benefits -- most are still alive today. Why them and not life beneficiaries?
That's exactly the point at which your fantasy evaporates.
Max, the answer is because we are in complete agreement when it comes to annuitants. I've never made the claim and have never heard the claim that all annuitants have always been paid at 100%. However, I have often heard this claim about life beneficiaries. I haven't dug through your information as of yet, but I don't need to be right. As I keep saying, I'd be happy to be proven wrong. I hope that there is information in this last post of yours that proves you right. Up to this point, there has only been your assertions.
Posted: Sun Nov 21, 2010 02:52 pm Post Subject:
I've never made the claim and have never heard the claim that all annuitants have always been paid at 100%. However, I have often heard this claim about life beneficiaries. I haven't dug through your information as of yet, but I don't need to be right.
What a load of CRAP that statement is! "I don't have to know the facts to be able to make a boneheaded statement," is what you've just said. Well, that's true. But you ARE NOT RIGHT. But you won't put in the effort to find out.
I have often heard this claim about life beneficiaries.
And I've heard there's a pot of gold at the end of the rainbow, that Superman can be killed by Kryptonite, that Santa Claus lives at the North Pole, and the Tooth Fairy will give you money if you leave your tooth under your pillow when you go to sleep.
What anyone "hears" is BS compared to the reality of what people GOT. Or didn't get.
I heard the car salesman tell me the warranty covers EVERYTHING. Think that's 100% correct? I heard the lawyer say, "We're going to get you $1,000,000" and then accept a $51,000 settlement, of which they still took their $17,000 cut (true circumstance involving my now deceased father in 1977-1978).
OK, for the last time. Look at p.133 of the Congressional hearing document (you might want to start a few pages ahead of that for some more background about the "debts" of the Guarantee Associations (from their statutory payments to policyholders and beneficiaries), where you will see this record of testimony:
Mr. OSE. OK, California Life Insurance Guarantee Association.
Then there are other states that have participated.
Mr. GREEN. Right.
Mr. OSE. So they would each get a piece. So if you add all that up, what does it come to?
Mr. LEVINE. Do you mean what is the percentage?
Mr. OSE. No, what is the number we have got to get or recover in order to make everybody whole?
Mr. LEVINE. Oh, I don’t have that number, but it is astronomical. I think the loss for time value of money and everything else——
Mr. OSE. This is Washington; I mean the numbers—[Laughter]——
Mr. LEVINE. I don’t know the number. It is billions, ‘‘billions ’’ plural, I am certain.
Mr. OSE. $5 billion?
Mr. LEVINE. Oh, I couldn’t even speculate because I don’t know. I am not sure that anybody, first of all, has calculated the actual loss that each policyholder took, taking what they got versus what they would have gotten had Executive Life never gone under. I don’t think that number exists.
Mr. OSE. OK, so it is more than $1 billion because you said ‘‘billions.’’
Mr. LEVINE. I think it is more than $1 billion, yes.
Mr. OSE. Is it more than $2 billion?
Mr. LEVINE. I’m going to guess more than $2 billion, but, I mean, I——
Mr. OSE. Is it $10 billion?
Mr. LEVINE. I don’t even have a basis for speculating on how much it takes to make everybody whole. I would hope $10 billion would do it, but I don’t—I shouldn’t even say that because I just really don’t know.
Don't think for a minute this is ONLY a discussion of annuity policyholders or GIC holders. There were only about 5600 of them in California, compared to 160,000 life policyholders and some 330,000+ policyholders across the country. Some of those life polices were the subject of death claims -- how many? I cannot tell you, and you'd have to get the information from at least 49 different Guarantee Associations.
But other pages of the record of the hearing will show you that those life policies that went to Aurora . . . the people got new contracts with HIGHER premiums to account for the losses to cash value. So the whole concept of "being made whole" -- even the speculation of Rep. Ose about $10 Billion being enough -- it a feather in the wind.
Give it up! People lost money. Admit it. Death claim beneficiaries, annuitants, life policyholders. Almost EVERYONE connected contractually to Executive Life of California -- in all states other than New York (where there was the second company, ELNY, due to NY insurance law prohibiting most "foreign" or "alien" insurers from doing business there) -- LOST MONEY IN SOME AMOUNT, big or small.
Please, step into the real world. Stop listening to the still small voices and discover the truth.[/quote]
Posted: Sun Nov 21, 2010 03:17 pm Post Subject:
Max,
You are so damn sure of yourself, yet you still haven't posted anything that has shown a single death benefit not being paid at 100%.
I've been putting in the effort and I have never been able to find anything that shows that death claims weren't paid at 100%.
On two points, you will get no arguments from me. 1)The Guaranty Associations have a limit as to how much they will pay each policy holder. 2)Lots of people lost lots of money with Executive Life.
That still doesn't answer the specific question as to whether any LIFE INSURANCE DEATH CLAIMS were paid out at less than 100%.
From what you quoted notice that the only loss that the specifically mention does not include life insurance:
California has approximately 180,000 policyholders. In California the State guarantees annuities up to $100,000 and life insurance up to $300,000. Annuitants and recipients of structured settlements in excess of State guarantees suffered great economic losses, and these are the people who can least afford it.
Posted: Sun Nov 21, 2010 03:32 pm Post Subject:
Executive Life wasn't insolvent when they were taken over. There was the fear that a run on the company would make them insolvent. Since they weren't insolvent at the time, why would any death claims not be paid?
You have continually said that statements include death benefit claims, but nothing that you have linked or copied has said that. You are making assumptions.
Nobody has said anything about everyone being made whole. I have no doubt that people have lost cash surrender value.
I'm making one and only claim that I'd like to see refuted. "All death claims were paid 100%."
Please show us anything about a death claim not being paid 100%. Everything here is your assumption.
You're assuming that since Guaranty Associations were involved, big claims weren't paid.
You're assuming that they were insolvent.
You're assuming that since people lost money, death benefits weren't paid 100%.
The problem with this is that they weren't insolvent when they went under thus there was money to pay death claims, the Guaranty Associations weren't the ones paying future death claims and nowhere does it say that death benefits weren't paid at 100%.
One would think that if a death claim wasn't paid at 100%, somewhere there would be information that specifically says this.
Your information doesn't say this. I can't find information that says this. Again, I can be wrong, but the only information that I have saying that I'm wrong is your word on the subject. You may be right, but you still haven't been able to back it up.
I know that you are convinced, but don't you wonder why you have found specific things about GICs losing money and annuity holders losing money, but there is nothing other than conjecture about beneficiaries.
Posted: Sun Nov 21, 2010 03:46 pm Post Subject:
Accuquote agrees with me. This doesn't mean that they are right, but without anything specific to the contrary...
"If you hold a life insurance policy from American General (an AIG subsidiary) and you’ve been paying attention to the news, it’s completely understandable as to why you might be feeling a bit anxious. Certainly the mortgage crisis has affected several large financial institutions and if you’re an American General life insurance policy holder, you are rightfully concerned.
As an AccuQuote customer and an American General life insurance policy holder, the choice is always yours to switch life insurance carriers. Our goal is to help you make an informed decision. With that said, I want to provide you with the following information, which I believe will help guide you in your decision making process:
• American General is a wholly owned subsidiary of AIG
• American General is strong, profitable and growing
• Insurance continues to be one of the largest sources of revenue for AIG.
• The insurance industry is highly regulated – So much that all life insurance companies doing business in the US must keep cash reserves for any/all life insurance they issue. These cash reserves are primarily invested in high quality investment grade fixed income securities which are extremely stable. This practice ensures the contractual obligation for the life insurance company to pay death benefits for term policies that are in force.
• If there is concern about the ability of ANY insurance company to pay claims, every State insurance commissioner has the authority to essentially merge the assets of any troubled insurer through a takeover by more solvent insurers. This method has been used successfully and repeatedly to prevent the default of even one payment of a death claim in over a hundred years in the United States and to make sure that every in-force policy is honored based on the original terms and conditions. No death beneficiary in the history of the U.S. life insurance market has ever been denied or shorted on a legitimate death claim payout
AccuQuote will in fact continue to sell American General as they are still rated A or better by A.M. Best. We believe they are in solid shape and will continue to be a leader in the term life market despite the difficulties their parent company is experiencing.
However, again, the choice is always yours. We do not push one company over another. Therefore, if you are concerned regarding an existing policy or one you recently applied for at American General, we would be more than happy to assist you in choosing an alternative company. Simply feel free to contact us at 800-442-9899 regarding any questions or concerns you may have."
Posted: Sun Nov 21, 2010 03:48 pm Post Subject:
In case you missed it in my wall of text, the relevant portion stated:
No death beneficiary in the history of the U.S. life insurance market has ever been denied or shorted on a legitimate death claim payout
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