The Illinois Life and Health Insurance Guaranty Association (“Association”) is a non-profit legal entity that provides limited protection for the life, health, annuity, and unallocated annuity policies owned by Illinois residents if their insurance company becomes insolvent and is ordered liquidated by a court. To provide this protection, the Association either continues the insurance policy coverage while paying the claims and other policy benefits or funding the transfer of the policies to another insurance company subject to certain limits (see below). The protection provided by the Association is based on Illinois law and on the language of the insolvent company’s policies at the time of the insolvency. The Association uses an assessment mechanism to provide benefits and collect money from Illinois-licensed insurance companies collecting Illinois premium for life, health, annuity, and/or unallocated insurance policies. In 2015 those insurance companies collected approximately $27.9 billion in premium.
The basic protections provided by the Association for the insured of a member insurer which is found to be insolvent on or after August 20, 2010 are:
- $300,000 in death benefits
- $100,000 in cash surrender or withdrawal values
- $500,000 in hospital, medical and surgical insurance benefits*
- $300,000 in disability insurance benefits
- $300,000 in long-term care insurance benefits
- $100,000 in other types of health insurance benefits
- $250,000 in withdrawal and cash values
*The maximum amount of protection for each individual, regardless of the number of policies or contracts, is $300,000 except special rules apply with regard to hospital, medical and surgical insurance benefits for which the maximum amount of protection is $500,000
Certificates under health maintenance organization plans are not covered by the Association.
If you are not an Illinois resident, the guaranty association of the state where you live at the time a company is ordered liquidated will likely provide you with coverage, unless the insurance company is not licensed in your state. If the company is not licensed in the state where you live at the time the liquidation is ordered, then the guaranty association of the state where the company is domiciled may provide you with coverage. For the contact information for another guaranty association, please go to the NOLHGA website by choosing the “Links” menu and then choose the specific state guaranty association.
The Association is not an insurance company that sells insurance policies. If you have an active insurance policy and need contract information for your existing insurance company, please contact the Illinois Department of Insurance at 1-217-782-4515.
For more information about the Association please review the Frequently Asked Questions (“FAQ”) section of this website.