AIG is now BMO:Five reasons to stick with AIG Life

AIG

American International Group (AIG) has been front page news the last few days. The company has had three quarters of staggering housing-related loses and it has lost 90% of its stock price.

The questions many AIG Life of Canada policyholders are asking – how safe is my life insurance policy?

Comments from AIG Canada’s President Peter C McCarthy on Sept 15th reassured its broker network that the company is on solid financial footing. “AIG Life of Canada remains a strong, secure, well capitalized business. It is a separate legal entity that operates only in Canada and has not been affected by the U.S credit crisis,” he said.

The following are five additional reasons why you should stick with AIG:

  1. New coverage will be based on your new age and your current health status. A new policy will also be subject to a new incontestability and suicide provisions

  2. Cancelling your existing AIG life insurance policy may trigger a taxable gain. Many older AIG policies have valuable tax benefits. These benefits may not be available on new policies and cancelling your policy may increase your tax bill for the upcoming year.

  3. Certain AIG policies carry surrender charges for cancelling the plan (this is not exclusive to AIG) these penalties can be in the thousands on certain Universal Life policies.

  4. The office of the Superintendent of Financial Institutions of Canada (OFSI) regulates Canadian insurance companies for regulatory compliance and financial solvency. This includes ongoing financial reporting to OFSI and undergoing periodic financial examinations. OFSI regulates AIG Life of Canada

  5. AIG is Member Company of Assuris.  Assuris was founded in 1990 and is a not for profit organization that protects Canadian policyholders in the event that their life insurance company should fail. Assuris covers 100% of the death benefit on policies $200,000 or less. On policies over $200,000 they cover the greater of 85% of the original face amount or $200,000. Assuris also cover 100% of life insurance cash values up to $100,000.

If you do decide to replace your existing AIG policy, make sure the new agent/broker completes a life insurance disclosure form and has you sign it; this form is required by law and gives you a snapshot comparison of the your new proposed coverage and your existing plan. You have 20 days from the time you receive a copy of the disclosure form to withdraw the new application and receive a full refund of any premiums paid.

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  • LSM Insurance
    October 12, 2008 at 8:14 am

    Hi Melinda,

    Thanks for your note. You can obtain an instant life insurance quote from the following link http://lsminsurance.ca/calculators/canada/term-life.php .

    Alternatively I’m happy to help out with a quote. My contact details are below.

    Lorne S. Marr CFP MBA
    President
    LSM Insurance
    2900 John Street Suite 302
    Markham, Ontario L3R 5G3
    Tel: 905-248-4849 Cell: 647-388-3617
    Toll Free: 1-866-899-4849 Fax: 905-300-4848

  • Melinda Joyce
    October 11, 2008 at 10:04 pm

    Hi:
    I am interested in obtaining a Live Insurance Policy, and would like a quote?

    Thank You.

  • LSM Insurance
    September 25, 2008 at 8:18 am

    Hi Catherine,

    Thanks for your note. I will send you some information on life insurance in a seperate email. Please let me know if we can help out further.

    Best Regards … Lorne

  • catherine mitchell
    September 25, 2008 at 7:02 am

    I’m interested in the life Insurance, could you please send more information, thank you.

  • LSM Insurance
    September 23, 2008 at 11:15 am

    Hi Ann,

    Thanks for your questions. AIG has not gone bankrupt. However,if you are in Canada – and AIG were to become insolvent they would be covered by Assuris – http://www.assuris.ca. Below is a summary of how Assuris protects Canadian policyholders if a member insurance company becomes insolvent. Regards … Lorne

    • Life Insurance death benefits up to $200,000 or 85% of the promised Death Benefit,
    • Life Insurance cash values up to $60,000 or 85% of the Cash Value, whichever is higher.
    • Critical Illness benefits up to $60,000 or 85% of the promised benefits, whichever is higher
    • Disability Insurance benefits up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.
    • Long Term Care benefits up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher

  • Ann Todd
    September 23, 2008 at 11:05 am

    Hi, I have been with A.I.G a long time….I have been told they have gone bankrupt, is this true?….What do I do, if this is true?….I have paid alot of money, as well as my husband….We did it joint….please help ease my mind…thank you

  • LSM Insurance
    September 20, 2008 at 9:26 pm

    Hi Dee,

    Thanks for your question. In Canada three insurance companies have gone bankrupt:

    Les Coopérants on Jan 3rd 1992
    Sovereign Life on January 18th 1993
    Confederation Life on August 11th 1994

    In each of these instances Assuris http://www.assuris.ca – which was founded 1990 was called upon to deal with the insolvency. Through the three insolvencies, Assuris protected almost three million people representing over 10 % of Canadians.

  • Dee
    September 20, 2008 at 9:21 pm

    How do I know Assuris will be around to pay out if AIG goes bankrupt?