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Last Visited: 12/8/2008
Marvin Feldman, president of the Life and Health Insurance Foundation for Education, said AIG's financial problems stem from risky investments made by its holding company.
AIG's insurance subsidiaries are "highly regulated and well-capitalized," he said.
If the insurance company failed, Feldman said, losses would be covered by your state's guaranty association, up to the maximum guaranteed by your state.
Most states cover up to $100,000 in withdrawal and cash value for fixed annuities.
The state guaranty associations don't cover variable annuities.
However, those annuities offer another type of protection for investors, Feldman said.
Most variable annuities offer a choice of mutual funds, known as subaccounts.
These are segregated accounts, Feldman said, which means if the insurance company files for bankruptcy, creditors can't file claims against them.
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