This is a good question, and one that doesn't often come up, though I wonder how many people are actually thinking about it and not saying anything. For the most part (despite current economic conditions) there are many institutions that are pretty safe to do business with long term.

It is impossible to know what will happen 30 years from now, which is why you shouldn't just stick your money with someone and forget about it. It's called self-responsibility. Every year, once a year, you should review your financial situation and make sure that you are happy with where you are at and where you (and the company you do business with) are projected to be when it's time to execute your exit strategy (i.e. retirement).

Most insurance companies (as long as they don't get into banking activities) are very safe institutions. If you are worried about a particular insurance company, check their ratings. Also, check out their management, and how they run the company. The best research will actually come from a good financial professional. The International Association of Registered Financial Consultants can help you research a good financial adviser and possibly make a recommendation.

There is nothing inherently wrong with pooling all of your money with one company, just make sure that that company is structured to be stable for the rest of your life. Sometimes buyouts and change of management can bring bad news for investors and policy owners. This is something that can happen no matter how much research you do.

Still, diversification for diversification's sake is not the best way to solve this dilemma. The most important factor in your decision is to make sure that every company you do business with is set up for long-term profits, not short term. Mutual companies (as opposed to stock companies) can often be the best companies to do business with because the company answers directly to the policy owners. Stock companies are publicly traded and answer to shareholders, the majority of which may not be policy owners.

Some advisers don't specialize in insurance and retirement planning, so watch out for that. Make sure you are doing business with a knowledgeable financial adviser and that they are competent in this area. Advisers that have inroads with actuaries can also be helpful. Actuaries are the folks who build and design insurance products...but they typically also have inside information about every major company and what they are doing right...and what they are doing wrong. Also, if the actuary no longer works for a specific company, they are going to be a good source of unbiased, inside, industry information.

Such advisers are rare, but if you can find them, stick with them. They can give you more insight as to whether or not you should pool your money than any alleged expert that you'll likely see on the  T.V., hear on the radio, or read about in the hottest new issue of your favorite magazine.

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