How safe are Banks?

Banking regulation and supervision holds banks to certain requirements, restrictions and guidelines, that are enforced by a financial regulatory authority, generally referred to as banking supervisor.  Banking regulation and supervision aims at ensuring that banks are safe and sound and promote market transparency between banks and the individuals and corporations with whom they conduct business.  (However, banks lack the independent, stand-alone cross-over supervision that insurance companies enforce upon themselves.)  Though bank failures get a lot of media attention, customer finances are usually not severely impacted; as long as they do business with an FDIC-insured institution and keep less than $250,000 per account ownership.

Is it safe to keep more than $500,000 in a brokerage account? 

In most cases, the brokerage will liquidate on its own without needing the Securities Investor Protection Corporation to intervene.  That being said, if the firm refuses or is unable to self-liquidate and the SIPC must step in, you may not be able to claim more than $500,000 in securities and cash. Therefore, the safest option is to move your money above that $500,000 SIPC coverage threshold to a different type of account, or to a different brokerage altogether.

How safe are insurance companies

If you decide to do business using the Untaxed Retirement Income Plan, your assets will most likely exceed the $250,000 or $500,000 limit levied by banks and the Federal Reserve; as well as the SIPC: either with the first deposit, or certainly after you have kept your Income Strategy in force for just a few years.  Also, your death benefit, at the beginning will most likely exceed $500,000+, thus the imperative need for a financial institution more financially responsible then an FDIC bank or the Security Exchange Commission.

Beyond your insurance company’s sheer financial strength, there are six safety nets to help guarantee the company will be able to pay its claims.  

1. 1.  The State Insurance Commissioner’s Office – can run and fund an insurance company, in the event it gets into financial trouble. You can be confident your policy will stay in force.
   2. Every life insurance company is audited by several independent ratings companies.  Examples: Standard and Poor’s, Moody’s, Fitch, A.M. Best.  The Untaxed Retirement Income Plan selects the very best companies to work with; based on: A.  financial strength.  B. the very best product for the client’s needs.  C. how long the company has been in business.    

•  Additional protections include:  

1. One of the primary duties of state insurance departments is protecting policyholders from the risk of an insurance company in financial duress. If a life insurance company gets into financial trouble, the insurance commissioner, in the company’s home state, starts a process called rehabilitation to help the company regain its financial footing.
2. Also, each state has a state insurance guaranty association, aka, The GA, that provides the necessary funds, to pay insurance policies in the event an insurance company, has financial trouble, or goes bankrupt.  Each state’s GA is funded by every insurance company participating in that state.
3. Also, there’s a nationwide organization called the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA). It’s made up of the life and health insurance guaranty associations of all 50 states and the District of Columbia.