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What happens if my life insurance company go bankrup?

Do you know of any similar situation, what happens to my money? Yes it is. but cooperators in canada went bankrup

Public Comments

1. If the company goes bankrupt, the creditors will get their shares first through legal means. However, it is unlikely that an insurance compamy goes bankrupt because they have to hold a reserve with the government as a form of bond. At the same time, there are stict laws governing the operation of any financial companies. That been said, I am assuming that your insurance company is one with reputation and is in a developed country.
2. Many times the policies are purchased by another company or another company will come in & bail out the company that is going bankrupt. Life insurance is pretty profitable if priced right so this may happen. Has the bankruptcy gone all the way through the court system? I do not know how it works in Canada though. Does Canada have different types of bankruptcies like the US does? Call the Department of Insurance in your jurisdiction to see what information they have about your company. They are the ones that will know if anything is happening or if another company is going to go in to help.
3. The Co-operators is still in business to the best of my knowledge (in fact I saw an ad on television recently). I can't comment on them too much, as I am a broker, so tend to deal with the bigger insurance companies (Manulife, Sun Life, AIG, etc etc). In Canada, Assuris (http://www.assuris.ca/) is a non-profit organization with members from all the major insurance companies. They protect the Life Insurance policies in case of bankruptcy. For Life Insurance, its 85% of the death benefit up to $200K. The only company that claimed bankruptcy was Confederation Life, back in the early 1990's. However, all the other insurance companies purchased the blocks of insurance business from ConFed, thus moving the policies over to them. For example, all of the Life Insurance polices from ConFed, are now with Manulife Financial. All the RRSP/RIFF business is now with Empire Life, etc etc. So even after that, all of the policyholders are still protected. The reality is that its unlikely that the insurance industry would let a company go down like that, so that policyholders had to depend on Assuris. It makes more sense to buy the block of business from the failing insurer at a low price, and then they make their money back from collecting premiums from policyholders.