First it was banks, then it was automakers and now the government is set to award bailout money to the life insurance industry. Within the next few days, the Treasury Department is expected to announce that a select few life insurers will receive cash from the Troubled Asset Relief Program (TARP).

Once thought of as somewhat immune to the financial crisis since they usually put their money towards relatively safe investments, the life insurance industry seems to be a late bloomer in the “strapped for cash” game. If these hurting life insurers sold securities to raise cash, it could cause markets to tumble – something we’ve seen enough of and something the government is wisely trying to avoid by infusing cash into the industry themselves.

“The life-insurance industry is an important piece of the U.S. financial system. Millions of  Americans have entrusted their families' financial safety to these companies, so keeping them on solid footing is crucial to maintaining confidence.”

The news of the bailout has helped shares of Hartford Financial, Prudential, and MetLife gain points in early trading today.

Several life insurers have applied for the TARP funding, including Prudential Financial, Hartford Financial Services Group and Lincoln National Corp. Genworth Financial has also taken steps towards gaining access to the federal funds.

Emily Holbrook
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