What happens to my policy if AIG goes under?
It’s the bad mortage loans that are befalling AIG and the like (Lehman, Bear Stearns etc.) Now with AIG in financial troubles, there’s always a good chance that another insurer may buy out AIG’s insurance operations and your policy. Having said that, if AIG’s life insurance division gets bought out by someone else, there’s no gurantee that your low premium will be maintained. The acquirer (and even AIG in the unlikely case that it survives) can raise the policy premium, I suppose.
IF they filed for bankruptcy protection the life insurance holders should be fine. If anything they’d spin off the profitable insurance unit to a buyer in order to raise cash. AIG doesn’t sell insurance…American General does (as does their other subsidiaries)….keep that in mind. AIG just owns American General.
