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If you’re old enough to remember the Great Depression – or “It’s a Wonderful Life,” then you know that banks haven’t always been the safest place to keep money.  In fact, FDIC insurance came into existence after massive bank failures during the Great Depression.

Despite FDIC insurance, bank failures continue today at an alarming rate.  Turns out – the “bail-out” safety net of FDIC insurance encourages banks to take more risk – not less.  And FDIC insurance really isn’t insurance at all.  It’s just a government guarantee with a woefully deficient number of real dollars there to protect depositors.

Perhaps that’s why – over the last decade – a flood of money had moved from banks – to stodgy old insurance companies, in the form of annuities and cash value life insurance.

Insurance commissioners in each state require insurance companies to pay into state guaranty funds.  These funds protect policyholders in the event of a failure.  The result:  in the last 5 years, there have been 465 bank failures, and only 10 insurance company failures.

To be fair, neither bank depositors nor insurance policyholders have lost money to those failures (up to the coverage maximums at least), but you have to wonder; with the credit rating of US debt being downgraded, and the government’s voracious spending appetite – where is real safety today?

Maybe it’s time to take a new look at an old insurance company again.