My life insurance policy was purchased 24 yrs ago and the company is now closed. What are my options?


Seeing that the insurance company has closed, you can go to the state guaranty fund for help on how to make a claim against your insurance policy.

The state guaranty fund is obligated to ensure that your investment with the insurance company is safe (up to a certain limits).

If you had been able to go to the guaranty fund organization or to the Insurance commission before the official closure of your insurance company, you may have had the option to transfer your policy to another company that is more financially stable.

Now your options would be:

  • To surrender the policy to the guaranty fund and get the cash value
  • To wait for a claim to be made and make your claim at the state guaranty fund office
  • Go to the State Insurance Commission for help on how to make a claim

The comfort is that all the benefits promised in the policy are guaranteed, even with the closure of your insurance company. However, you should also be sure that you have been faithfully paying your premiums or that the policy is in force during the time that you file your claim.

Another thing to remember is that for you to be eligible for coverage by the state guaranty fund, you should be a resident of that state. There are also set limits as to how much you can claim, this will not only be for your life insurance policy but for annuities and health insurance.

The state guaranty fund is on hand to protect the public so that their trust in insurance companies is not ruined. It is also rare that insurance companies go down financially. All insurance companies are required to keep reserves so that they can pay claims, even when there is a considerable amount of them going in at the same time.

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