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Is My Money Safe?

You can also calculate your FDIC coverage on FDIC’s website; click on "EDIE the estimator" or "Is My Account Fully Insured?" at www.fdic.gov.  You can also calculate your credit union insurance coverage by searching for "share insurance estimator" at www.ncua.gov.  For more information or to register complaints, contact the NCUA consumer hotline at 800-755-1030 or e-mail consumerassistance@ncua.gov.

Brokerage

There are safeguards for your money in brokerage firms.  First, strong rules require brokerage firms to keep customer accounts separate from the firm’s accounts, so your money should be safe even if the firm goes under.  Second, accounts are insured up to certain limits by the SIPC (Securities Investor Protection Corporation). 

Is My Brokerage Covered by SIPC?

Yes ____ No ____

Check for the words "Member SIPC" on the company's website or call SIPC at 202-371-8300.  If your brokerage is not a member of SIPC, consider moving your money to another financial institution.

What does SIPC cover?

SIPC covers your account up to $500,000 for cash and securities such as mutual funds, stocks and bonds.  However, there is a maximum of $100,000 for cash.  The limits are the same for individual and joint accounts.

The coverage applies to firm failures, not market losses for your individual account.  For example, if you have $90,000 in a brokerage account and it loses $40,000 in value due to stock market declines, that $40,000 loss is not covered.  If your brokerage fails, however, then you are covered up to $50,000, the current value of your account.  Some firms also provide additional private insurance on top of the SIPC coverage—check with your brokerage.

To find out if your money is insured, fill out the table below for each brokerage where you have accounts:

Brokerage

Balance

Cash

Securities

Total



Does your cash exceed the $100,000 limit? _____  By how much? _____

If yes, consider moving at least that extra amount to another financial institution.

Does your total, including cash, exceed the $500,000 limit? ____ By how much?

If yes, consider moving at least that extra amount to another financial institution.

For more information on SIPC, go to www.sipc.org.

Insurance

The insurance industry is regulated by the states. Most states require insurance companies to participate in a state guarantee fund or association. State guarantee funds step in to pay claims in the event that an insurance company fails. A state may have one or more guarantee associations, with each association responsible for a certain type of insurance. While there may be differences among states, most states set basic coverage guarantee limits of:


• $300,000 in life insurance death benefits

• $100,000 in cash surrender or withdrawal value for life insurance

• $100,000 in withdrawal and cash values for annuities

• $100,000 in health insurance policy benefits

• $300,000 in homeowners benefits

• $300,000 in auto insurance benefits


To find out if your insurance policy is protected by the guarantee fund, fill out the table below and figure out if your policies are under the limits by calculating across each row:

Insurance

Insurance Coverage Amount

General Limits

Insurance Coverage-Limit=

Life Insurance Death benefits

$300,000

Life Insurance Cash Value

$100,000

Annuity Cash Value

$100,000

Health Insurance Benefits

$100,000

Homeowners Benefits

$300,000

Auto Insurance Benefits

$300,000


For each type of policy, does your coverage exceed the limits? Yes ___No _____

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