Guaranty Association

The Guaranty Association is a state-mandated organization that protects policyholders in the event an insurance company becomes insolvent or is unable to fulfill its financial obligations. Each U.S. state has its own Life and Health Insurance Guaranty Association, which operates under state law and is funded by member insurance companies.

How It Works

If an insurance company licensed in the state fails, the Guaranty Association steps in to continue coverage, pay eligible claims, or transfer policies to a financially sound insurer—up to certain limits set by state law. These protections typically apply to life insurance, health insurance, annuities, and Long-Term Care Insurance.

Long-Term Care Insurance

For policyholders with Long-Term Care Insurance, the Guaranty Association offers a safety net if their insurer becomes financially impaired. While the specific coverage limits vary by state (often ranging from $300,000 to $500,000 for long-term care benefits), this protection can provide critical reassurance to older adults and families relying on the policy for future care expenses.

Important Notes

• Only policies issued by insurers licensed in the state are covered.
• Coverage limits and rules differ by state and policyholders should consult their state’s guaranty association for details.
• Guaranty Associations are not a substitute for choosing a financially strong Insurer when buying a policy.
• Every policy has an enclosure regarding the association.

Find Your State: How You’re Protected - National Organization of Life & Health Insurance Guaranty Associations -NOLHGA