Phil Cannella – Phillip Cannella News: Phil Cannella has taken a good hard look at both the banking system and the insurance industry and compared their safety and during harsh economic times. Phil Cannella did a historical look, not just examining the last few years.
Phil Cannella points out that during extreme economic times such as after the 1929 crash when 100% of account holders wanted 100% of their money back from banks, banks were only required to keep 12 cents on every dollar on hand in the 1920s, so almost 100% of the banks had to stop operating. They either suspended their operations or went under because they didn’t have 100% of the money their depositors put in – and wanted back.
This is an interesting look at the banking system and suggests that they may not be as sound as we might consider. On the other hand, Phil Cannella points this out with regard to insurance companies: “But the reverse was true with insurance companies. In contrast to the collapse that banks experienced, insurance companies had the statutory accounting system in place in the 1920s so that when 100% of insurance holders wanted 100% of their money back from the insurance companies, they got every dime back. Even in the worst market crash in American history, almost 100 years ago, insurance companies were and continue to be one of the safest industries in the world. Not a single insurance company went under in 1929.”
This speaks volumes for the safety of insurance products such as life insurance and annuities and is why Phil Cannella utilizes some annuities in his crash proof retirement system.
