What are the coverage limits under the state guaranty fund in case an life insurer files for bankruptcy?

There are exceptions for variable contracts.

Each state sets the amount of coverage provided by their guaranty association and the amounts differs from state to state. The majority of the states followed the lead of specified in the National Association of Insurance Commissioners’ (NAIC) Life and Health Insurance Guaranty Association Model Law:

  • $300,000 in life insurance death benefits
  • $100,000 in net cash surrender or withdrawal values for life insurance
  • $250,000 in present value of annuity benefits, including cash surrender and withdrawal values (payees of structured settlement annuities are also entitled to $250,000 of coverage)
  • $300,000 in long-term care insurance benefits
  • $300,000 in disability income insurance benefits

There can be a overall cap of $300,000 in total benefits for any one individual with one or multiple policies with the insolvent insurer.

Priority is given to insureds with benefits in excess of the above limits against the failed insurer. The policy owner may receive additional payments as the insurer’s assets are liquidated. More information can be found at Insurance regulators website.  The common website would be: insurance. (type in your state). gov

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