AIG Alert: What are the Rights of an Insured Individual?


Worried about your insurance policy? Knowing your rights might ease your stress.

American International Group (STOCK QUOTE= AIG) received a $85 billion loan from the Federal Reserve breathing new life into the insurance and financial services company. But, many policy holders are still fretting about insurance.
Here’s a general look at what you should know as an insured individual –take a look at your personal policy for the specifics:

RIGHT #1: You have the right to change coverage at any time.
At any given time, you can stop automotive and life term insurance with a lapse of payment. For some policies, depending on contractual obligations, a short term cancellation fee, usually between $10 to $40, may apply. ALSO: For permanent life insurance policies, cancellation could mean subjection to a physical exam by a new policy provider.

RIGHT #2: You have the right to the insurance terms and conditions of the policy through the life of the contract.
The new insurance company is obligated to fulfill its contractual obligation. That means raising premiums is not in the cards until the policy is up for renewal.

RIGHT #3: You have the right to research your insurance providers rating.

Look for the financial strength of the insurance company, says Ron Adair, partner at the Resource Group in Glendale, Clif. What you’re looking to know: What kind of financial reserves do they have?. What surplus do they have?

RIGHT #4 You have the right to receive the cash value for premiums paid on permanent life insurance.
That translates into the cash you paid to a permanent life insurance policy, (less fees and costs that can vary) is still due to you.

RIGHT #5 You have the right to file a complaint.

Insurance companies are state regulated, and if you feel as though your insurance provider is violating a law, then you can file a complaint (

RIGHT #6 You have the right to sell a permanent policy to a life settlement company.

The purchase price of policies are generally larger than the cash value for premiums paid, which is why there’s been an increased issue in this action. To sell a permanent life insurance policy, contact an insurance broker.

Wondering which companies are owned, at least for now, by AIG?

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