Life insurance company-Bankrupt

[jj090805]

What is the name of your state?What is the name of your state? MA

What happens to the policy and potential benefits from the policy if the insurance company goes bankrupt? This is a separate, but related question, what about if you had turned over your rights of your life insurance policy to a funeral home to make pre-burial arrangements and the funeral home goes out of business? What will happen to you then?

 

[Dandy Don]

With bankruptcy, you are pretty much out of luck. Mention the name and city state address of the insurance company so I can do some research to see if perhaps it has changed ownership.

What is the name and address of the funeral home?

 

[ALawyer]

Each of the 50 states has a "Life Insurance Company Guaranty Act" that provides some protection, up to varying amounts, to most policyholders and benficiaries of most companies. It's not backed by the full faith and credit of the US Government, nor is it well known like the FDIC, but it certainly should cover a funeral policy.

If the funeral home goes bankrupt any money you pay them on a "pre-need" basis is likely going to probably be largely if not fully wiped out unless it was held in a segregated escrow fund. You'd be one of many unsecured creditors.