Page 170 - Ready Set Retire

Stephen J. Kelley

requirements have their operations suspended immediately
and are prohibited from selling more policies until they have
taken corrective action.

In the unlikely event that a company's annual statement or its
own examination reveals possible financial weakness, one of
several avenues is open to the company:

• Produce additional operating capital;
• Sell its business to another life company;
• Merge into another financially stable life company.
A legal reserve life insurance company does not simply close
its doors and go out of business declaring that all policies are
void. Legal reserve life policyholders enjoy personal security
safeguards unknown by other type of financial industry.

Fifth, if one company is purchased or merged into another,
there is no change in the policy benefits or premiums. Your
contract would be just as binding on the new company as it
was on the company you originally purchased it from.

So, the bottom line is, to lose any money in a fixed life
insurance or annuity policy due to company insolvency, ALL
of the following must happen.

• Your insurance company’s very safe bond portfolio
must fail.

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