Failure worries drag down life insurers

The life insurance industry is weakening, and policy holders around the country are calling their agents to ask the same question: Is my policy safe?

Probably. But there's good reason for consumers to keep an eye on their insurers' financial standing... Life insurers lost billions of dollars during the last three months of 2008. Prudential Financial Inc., Hartford Financial Services Group Inc., Principal Financial Group Inc., Lincoln National Corp., and Conseco Inc. all saw their cash cushions shrink amid the stock market's turmoil. Their stocks have plunged by more than half since Jan. 1.

...The troubles of insurance companies are nowhere near those of the banks. No company specializing in life insurance has collapsed during the current financial crisis, unless you count American International Group Inc. The problems at AIG, a financial services conglomerate, resulted not from its traditional insurance business, but from its investment banking and risky bond insurance. The company has gotten $180 billion in government funding, with officials calling the company too systemically important to fail...

AP: Failure worries drag down life insurers