Byron answering Shawn's question
Shawn's Question:
Hi Byron,
Thanks for taking time to answer questions. I am an Accuquote customer, with a term life policy with AIG. I have a question about whole life insurance/annuity products. How can some companies guarantee a dividend rate at pretty high percentage given these current financial challenges. With the financial markets and most real estate assets deteriorating as such, one company with a whole life product claims a guaranteed dividend rate of 6.5% as your policy matures. How could any insurance company (especially in these times) guarantee such a future return - wouldnt it be fair to assume their asset base has a strong likelihood of deterioration like any other company suffering? AIG has encountered issues and needed government bailout, I would assume many insurance companies investments have taken a hit. I find it hard to believe any large investments havent deteriorated over the last 18-24 months? So, how can an insurance company offer such a product - are they simply using todays premiums to pay tommorrows dividends? Where lies the risk of that future dividend?
Channel: Education
Uploaded: November 30, 1999 at 12:00 am
Author: accuquote
Length: 04:36
Rating: N/A
Views: 136
Tags: AIG % interest whole life insurance term life insurance AccuQuote annuity products life insurance policy
Video Comments
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yourlifesolution (November 30, 1999 at 12:00 am)
AIG is not a Life Insurance company, American General is and their assets are seperate. American General is financially sound, and AIG's woes are not intrisically an issue to their subsidiaries. |
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