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The State Life Insurance Guaranty Associations |
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Home - Life Insurance - Knowing Life Insurance Basics - The State Life Insurance Guaranty Associations |
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The State Life Insurance Guaranty Associations |
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There may be a situation where the insurance company that you were attached for so many years and where you made regular payments for your policy is not coming to any help during your time of need. This could send a serious situation into an alarming time. To protect you from this bitter situation, the National Organization of Life & Health Guaranty Association (NOLHGA) has come to rescue by paying for your coverage during your time of need, should your life and / or health insurance company fail to do so. The National Organization of Life & Health Guaranty Association started its operation in 1983. The aim was to provide some kind of backing to the individual state guaranty associations to help out the insurance customers as well as their beneficiaries, should the insurance company is unable to pay. Every individual state, Puerto Rico and the District of Columbia and have their own associations along with their own rules and guidelines on life insurance. Some of the Frequently Asked Questions (FAQ's) on Guaranty Associations, NOLGHA and state regulations are given below: Q: What will happen in the event of the life and / or health insurance company fails in the business? A: The National Organization of Life & Health Guaranty Association takes the responsibility to provide coverage of your claims or else transfer your policy to some other insurance company for your payment. Q: In the event of my insurance company failing in business, why should I pay the premiums? A: The State Organization of Life & Health Guaranty Association will only take over your policy if it is up-to-date. Hence it is important for you to keep all your policies current. Q: Whom to ask my questions on individual policy? A: The State Organization of Life & Health Guaranty Association where you live is the right authority to ask your questions, even if your policy was purchased in a different state. Q: Are all the insurance policies that I hold are completely protected? A: Many factors need to be taken into account with respect to the question. Firstly, it needs to be mentioned that only the health and life insurance policies come under the coverage of NOLGHA. The National Conference of Insurance Guaranty Funds is the sole body that deals with property and / or casualty insurance claims. Secondly, like FDIC that looks for protection of banking deposits with a higher limit of $100,000, NOLGHA has it own limitation that differ according to the state concerned. However, most of the state provides a minimum of:
If your policy value is higher than that of the state benefit limits, there will not be any loss to your remaining money. You have the right to make a creditor claim against the estate of the insurance company that has failed. At the time of liquidation of the assets of the failed insurance company, you will be paid off your policy balance by the court dealing it. |
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