Does Your Life Insurance Really Have You Covered?

Learn how to protect yourself and your family against life insurance failure

If your loved ones depend on you for financial support, you need life insurance. Without insurance, your family will not be able to support themselves in the event of your death and suffer a drastic drop in quality of life. Most Americans realize this and do their very best to provide for their family. But what happens if you have life insurance only to have the life insurance company fail?

When Life Insurance Companies Fail

Life insurance companies failing doesn’t occur to most people. You purchase insurance, you pay your premiums and you automatically assume the money will be there when you need it. You depend on this.

Unfortunately, this isn’t always the case. Unlike American banks, the federal government doesn’t regulate insurance companies. States regulate insurance companies. If there’s a problem with the insurance company, the federal government doesn’t step in and clean up the mess. This is something all consumers need to be aware of but most aren’t. That’s the bad news. The good news is there are ways to protect yourself.

Protect Yourself and Your Family

Although states regulate insurance companies, there are ways to safeguard your money and your future. Most states have coverage levels for insurance from $100,000 to $300,000. Check how much your state covers by visiting This site gives information on how the guaranty system safety net works as well as what your state covers.

Before you breathe a sigh of relief, you need to be aware that not all states have guarantee associations and in the event of insurance company failure, it could be quite a while before you see any of your money.

To protect yourself and the future of your family, you can do several things. First, check the cap of protection your state offers. If your state only guarantees $100,000 but you want to have more insurance, break up your insurance policies among several providers. This way, if one company fails, you still have insurance with the other companies.

Second, don’t cut costs when it comes to life insurance. Use a site like A.M. Best to research insurance companies. There’s no charge and you get honest independent ratings of all major companies. Only choose companies with high ratings.

Don’t let worrying about life insurance keep you awake at night. Follow these tips and rest assured your family is protected with the right amount of life insurance.