A small number of major insurance companies have recently sold off their individual life insurance business — the part of their company that serves the average person buying a personal policy.
Principal Financial stopped offering life insurance policies in September 2021 (though it will honor existing policies), while companies like Voya and Allstate have stopped offering coverage and passed existing policies on to other insurers.
Industry experts and wealth advisors say there’s nothing to fear if you unexpectedly find your life insurance policy is going to be transferred to a new provider. But, there are some ways to ensure your coverage is safe for the long haul.
What happens to your policy after a sale?
You shouldn’t experience any major differences when working with your new insurer, and your benefits are guaranteed, even if your policy changes hands.
Though it may be a surprising change for the average person, these types of sales are common.
“The transfer of books of business — whether involving life insurance policies or annuity contracts — is not new at all,” says Jack Dolan, ACLI spokesman. “Many people today are receiving benefits on policies and contracts that were not issued by the life insurer providing these benefits.”