Even after the government took the opportunity to step in and bail out one of our largest insurance companies, the stock market still managed to find a way to completely tank, because many investors were not persuaded that this intervention was going to protect their investments. This is when you have to find confidence, knowing where your money is and feeling confident that it is safe. Here are some examples of questions that are coming up now that banks are going bankrupt and the stock market is taking a serious downturn, and the answers that indicate whether or not your money is safe.

Question - If I have a $300k annuity with AIG, is my money safe right now?

Answer - Yes, your money is safe. Investments that are wrapped in life insurance, annuities, are held by subsidiaries that are regulated on a state level rather than actually held by AIG. In other words, they are not involved at all in the federal bailout of the AIG holding company. The NAIC or National Association of Annuity Commissioners website can give you more information about insurance companies regulated by the states and their current status.

Question - With the stock market in its current condition, is now a good time to invest in ETFs or index funds?

Answer - Index funds have come highly recommended in the past, especially when linked to a larger portfolio. Make sure that you do not assign too much money to a single fund, like financial services, however. Generally speaking, broader is better when it comes to investing in funds, and diversity is absolutely your friend.

Question - I have put money into an annuity that is backed by Lehman. Now that Lehman is dealing with bankruptcy, what is going to happen to my annuity?

Answer - Companies like Lehman are actually only middle men, or brokers. Your annuity is actually owned by somebody else all together. Fixed annuities are not generally guaranteed by the FDIC or SIPC, but their downside guarantee will protect what you originally put in, even if you lose the earnings on it.

Question - I have two different $250,000 IRA accounts. Because they are two different accounts, is the FDIC going to insure me for the full $500,000 amount?

Answer - Yes, each IRA is insured by the FDIC for up to $250,000 per account and per bank. If you have two separate accounts and each is as a different bank, then this $250,000 limit is going to apply to each one individually. Spreading your IRAs around different banks, primarily those that are FDIC insured, is the right way to invest in these IRA accounts.

Question - Are money market accounts insured?

Answer - If the account is held by a bank, then it will be insured by the FDIC. If it is an account that is held by the brokerage instead, then it will be insured by the SIPC. However, the money market’s performance is not insured, so it might be better to move your money into a high yield savings account instead for better safety.

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With so much uncertainty currently present in the marketplace, one of the most vital things that you can do to invest safely in a crisis market is simply to learn from mistakes in the past. Certain sectors of the market may seem incredibly attractive in times of a crisis, it is absolutely vital that you weigh all of your options before you make any important financial decisions relating to your investing.

With the stock market down, it may seem like a good idea to put some money into stocks which will surely rise again when the housing market rights itself. This may seem like sound financial advice, but how is it affecting other investors who made this decision ahead of you? Generally speaking, those who invested before you are learning the hard way about their investments. Don’t learn the hard way when you can learn from yours and others’ past mistakes.

Investing in a crisis market may very well appear to be a sound thing to do in some ways, because certain investment vehicles are suddenly looking very attractive. Just because the market has already made such a significant downturn, that does not mean that it is done sliding or that new investments won’t be negatively affected.

The best way to invest in a crisis market is not to invest at all, because there’s no telling what is going to happen next, or who is going to take the hardest hit. If you absolutely must make an investment, however, then there are investment options that you may want to consider, that can protect most if not all of your investment capital just in case the economy takes another dip and more financial institutions find themselves in trouble.

With so much uncertainty currently present in the marketplace, one of the most vital things that you can do to invest safely in a crisis market is simply to learn from mistakes in the past. Now that we are better aware of what investment vehicles did and did not survive all the recent market volatility, we have a better idea of which investment vehicles are worth putting money into and which should be avoided. Investments that are insured by the FDIC are a good choice, but only if you follow the necessary rules when investing in them. If you go over the limit that is insured by the FDIC, then you are throwing your money away because you will not see that money again if the market should happen to crash.

The important thing to do when investing in a crisis market is to really do your research, ask for recommendations, weigh options and work with experts to figure out what really is, and really is not going to work for you. There’s still really no telling whether or not a specific investment vehicle is going to be safe, but by learning from past mistakes, some are quite obviously safer than others and may do a better job of protecting your assets accordingly.

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Most of us look at insurance premiums as a big drain on our finances. Insurance policies do not come cheap, but they may be essential. In many ways, you can look at insurance as a way of avoiding financial failure in the years to come. While you can’t buy a policy to protect your checkbook, you can invest in insurance that will protect you and your money should an emergency occur. Let’s take a look at how various insurance policies can impact your financial future.

Health Insurance –

This is one of the most expensive forms of insurance, and if you’re generally pretty healthy, it can seem like a waste of money. But, look at it this way – let’s say that you are injured off of the job (where you would not be eligible for worker’s comp.) It is a serious injury and you’re unable to work for two months. In addition to missing that salary, you’ll also have to pay for all of your hospital bills. An unexpected illness or injury is one of the number one causes of bankruptcy. If you had an insurance policy, you would not have to worry as much about those bills and your financial burden would be smaller.

Business Insurance –

If you are running your own small business and you do not have business insurance, you are setting yourself up for failure. This is especially the case if you do business with the public or create products that are sold to the public. There is always a chance that someone will be injured and they may sue your company. It is entirely possible to lose everything you own very quickly in this situation.

Errors and Omission insurance is also vital, and often overlooked, for business owners. Anytime you are providing information to the public, you are at risk for giving advice that may not be used properly. In today’s litigious atmosphere, you really cannot have too much insurance if you have your own business.

Car Insurance –

This is usually required by states, but it can seem like a bit of overkill, especially if you’re paying a lot on your premiums. But, once again, if you imagine what could happen, it’s easy to see why this insurance is so important.

Let’s say that you only have a liability policy, which is generally accepted as the minimum requirement by most states. You’ve got one car, and it is not paid off. The car is wrecked, and although you were not at fault, the insurance will only pay for the damage you caused, and not the damage on your car. Suddenly, you’re stuck with still making car payments, even though the car has been totaled. Since it was your only car, you’ve got to go out and finance another. It’s easy to see how that could be disastrous for most people.

Insurance may be expensive, but only when you don’t have the right outlook. When you consider how much protection it provides to your financial interests, it is well worth the money.

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