Life Insurance Company California CA
Reader’s Question:
What should I do if the California life insurance company goes bankrupt?
Florence
Los Angeles, CA
The least thing that life insurance consumers want to happen is for their life insurance company to go bankrupt. Policy holders would probably think that they have lost their money and their family would not receive any proceeds upon his/her death. When this happens to your insurance provider, you don’t have to do anything to ensure that you are still protected.
“Guaranty Association” is almost available in every state in the US just like an FDIC handles bankruptcies of bank. With guaranty funds, you can receive proceeds on a certain limit in case your life insurance company becomes insolvent.
The life insurance company that goes bankrupt will send a letter once the company is placed under regulatory control. The state’s guaranty association or the life insurance company’s rehabilitator may also get in touch with you. If you did not receive any notification, you can contact your state’s guaranty association or department of insurance to know the steps to do.
There are cases when the policy holder receives documents and forms that help transfer policy to another insurance company. Continue paying your premiums in any case to keep you policy in force unless you receive an instruction otherwise. If you don continue paying your premiums, your life insurance policy could be cancelled because of non payments.
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