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Katherine Said:

My Mother purchased a Life Insurance Policy through Lincoln National Life Insurance? Is there fraud?

We Answered:

The company is sound, and the product is legitimate. Was it appropriate for your mother? There isn't near enough information here to tell.

This is a garden variety universal life product. The information you've given here is plausible, but it is also based on certain assumptions; primarily, the internal rate of return of the policy. If it was illustrated conservatively and realistically, it should perform at least as well as described. If not, your mother may need to pay additional premium to keep the policy afloat and in force.

A word of caution: Consult your tax advisor on the dangers of allowing this policy to lapse. Once your mother has withdrawn cash from the policy beyond what she's paid in (cost basis), the tax consequences of a lapse could be horrendous.

Whether or not the policy was sold responsibly, your concern illustrates what I preach time and again in this forum: Life insurance is not to be purchased from salespeople (agents, brokers, etc.) or financial laypersons. If someone's job is to perform a thorough and unbiased analysis of your financial situation, buy from him or someone he refers. If his job is to sell insurance, walk away.

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Kyle Said:

Should I keep my AIG life insurance policy?

We Answered:

IF you are concerned because AIG has been mentioned in the news a lot lately, you have nothing to be concerned about.

AIG's holding company is is trouble financially. The AIG Life insurance division is still doing very well and has no problems. Unfortunately, every is assuming it's the insurance division that's in trouble becuase it shares the same name.

Think of it like a record label. If the record label goes bankrupt, that doesn't mean all the bands within that record label will go bankrupt and fall apart. The band will just resign with another record label of something.

Same goes for AIG Life. If AIG Holdings gets into serious trouble, AIG Life will get sold to another company and your policy will still be inforce.

Your policy is not at risk by keeping it with them.

I find it interesting that the others are telling you to cancel it without even knowing the reasons why or what type of Life Insurance you even have! And if it was Whole Life, why is that an automatic cancel answer? That is terrible advice! The benefits of Whole Life have been well documented and depending on the need, it might be a the only option that suits your personal situation.

Your need for the insurance should be the deciding factor in whether you keep it first and foremost. Once you decide whether you need it or not then maybe shop it around, but make sure you are getting your advice from someone that fully understands your situation and can offer you multiple options and help show you which is most beneficial to you.

PS: There is no reason to not trust banks either (And for the record, AIG is not a bank!)...FDIC insurance protects the money you have in a bank account.

Please add more details if my answer didn't cover the info you're looking for and I'll take another stab at it.