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Frequently Asked Questions

Iowa - State Capitol
  1. What happens when my insurance company goes out of business?

    In most cases, a guaranty association will continue coverage as long as premiums are paid or cash value exists. It may do this directly, or it may transfer the policy to another insurance company. In any case, policyholders should continue making premium payments to keep their coverage in force.

  2. How is policy coverage determined?

    Coverage is determined by Iowa law and policy language at the time the Iowa Guaranty Association is activated to provide protection (when the member insurer is found to be insolvent and ordered liquidated by a court). In light of changes in the law and the dramatic variations in policy language, the Guaranty Association cannot make statements regarding coverage of a specific policy unless it is a policy with a company for which the Guaranty Association has been activated to provide protection.

  3. What is the Iowa Life & Health Insurance Guaranty Association?

    The Iowa Life & Health Insurance Guaranty Association was created by the Iowa legislature in 1987 to protect state residents who are policyholders and beneficiaries of policies issued by an insolvent insurance company, up to specified limits. All insurance companies (with limited exceptions) licensed to write life and health insurance or annuities in Iowa are required, as a condition of doing business in the state, to be members of the Guaranty Association. If a member company becomes insolvent and an order of liquidation is entered, money to continue coverage and pay claims is obtained through assessments of the Guaranty Association's other member insurance companies writing the same line or lines of insurance as the insolvent company. All 50 states, the District of Columbia, and Puerto Rico have life and health insurance guaranty associations.

  4. Who is protected?

    Life and health insurance guaranty associations cover individual policyholders and their beneficiaries; typically, persons protected by certificates of insurance issued under policies of group life or group health insurance are also covered. Limits on benefits and coverage are established by state law. For more information about coverage, see the questions below or contact the Guaranty Association or Iowa Division of Insurance.

  5. If I move to another state after purchasing a policy, will I still have guaranty association coverage? If so, who will provide it?

    If you purchased a policy from a company that is a member insurer of the state guaranty association where you reside, you will have coverage. Guaranty association protection is generally provided by the association in your state of residence at the date of the liquidation order regardless of where your policy was purchased. Policyholders who reside in states where the insolvent insurer was not licensed are covered, in most cases, by the guaranty association of the state where the failed company was domiciled.

  6. What contracts are covered?

    Generally, direct individual or direct group life and health insurance policies as well as individual annuity contracts issued by the Iowa Guaranty Association's member insurers are covered by the Guaranty Association. Such coverage is limited by the terms of the Iowa Life & Health Insurance Guaranty Association Act.

  7. Are all policies fully protected?

    Not always. If your insurance company fails, the maximum amount of protection provided by the Iowa Guaranty Association for each type of policy, no matter how many of that type of policy that you bought from your insurance company and subject to statutory limitations, is:

    Life Insurance: $300,000 in death benefits per life, but not more than $100,000 in net cash surrender and net cash withdrawal values

    Health Insurance: $500,000 in benefits which are for basic hospital expenses, medical-surgical expenses, or major medical expenses; $300,000 for benefits which are disability income protection, $300,000 for long-term care insurance, or $100,000 for other health insurance benefits including any net cash surrender and net cash withdrawal values.

    Annuity (owned individually outside of an employer retirement plan*): $250,000 in present value of annuity benefits, including net cash surrender and net cash withdrawal values.

    Individual annuity issued pursuant to an employer retirement plan*, or a guaranteed investment contract or a group annuity not issued pursuant to an employer retirement plan*: $250,000 of present value of annuity benefits including net cash surrender and net cash withdrawal values.

    Guaranteed investment contract or group annuity issued pursuant to an employer retirement plan*: $5 million

    * 401(K) plans, defined benefit plans, profit sharing plans, cash balance plans and other qualified retirement plans sponsored by employers (including sole proprietors). This term also includes 403(b) tax sheltered annuities sponsored by charitable entities and education institutions and 457 arrangements sponsored by tax-exempt entities and governmental entities.

  8. For example, if I own three annuities which each have a present value of annuity benefits, including net cash surrender and net cash withdrawal value, of $100,000 and my insurance company fails, how much is protected?

    The total protection per owner per member company is $250,000 for all of the present value of annuity benefits, including net cash surrender and net cash withdrawal values. As a result, if an individual owned three $100,000 annuities with the same insolvent insurance company, the individual would have total Iowa Guaranty Association coverage of only $250,000. The value in excess of this statutory coverage limit would be eligible for submission as a policyholder claim in the receivership, and the annuity holder may receive distributions as the company's assets are liquidated by the receiver.

  9. Is long-term care insurance covered by the Iowa Life & Health Insurance Guaranty Asociation?

    Yes. Long-term care insurance is typically considered health insurance for Iowa Guaranty Association purposes.

  10. What will happen to my insurance coverage if the Iowa Life & Health Insurance Guaranty Association becomes liable for my policy?

    Protection can be provided in one of several different ways. For example, a financially sound insurer may take over the troubled company's policies and assume the responsibility for continuing coverage and paying covered claims. The Iowa Guaranty Association may provide coverage directly by continuing the insurer's policies or issuing replacement policies with other insurance companies. In some situations, the Iowa Guaranty Association may work with other state guaranty associations to develop an overall plan to provide protection for the failed insurer's policyholders. The amount of protection provided and when you receive it may depend on the particular arrangement worked out for handling the failed insurer's obligations.

    For group health insurance, state law allows the Iowa Guaranty Association to continue your coverage only for a limited time based on the renewal date of your policy. Group contracts can be terminated as of sixty days after the finding of insolvency. If the Guaranty Association finds that benefits provided, provisions pertaining to renewal or premiums charged under any contract are not reasonable, it may offer alternate coverage as approved by the court. If the owner does not accept alternate coverage within 180 days of notification, the Guaranty Association has no liability for any claim incurred or continuing beyond the termination date.

  11. When might the Iowa Life & Health Insurance Guaranty Association provide benefits?

    If your insurer is no longer able to fulfill its obligations, ongoing benefit payments to you may be reduced or suspended by the courts in order to sort out the affairs of the financially troubled insurer. As a result, you may have to wait many months before the Iowa Guaranty Association is permitted or able to provide benefit payments. Hardship provisions may be instituted by the receiver to continue benefit payments.

  12. What is NOT protected by the Guaranty Association?

    Policies with insurers not licensed to do business in Iowa; policy benefits the insurer does not guarantee, which were not approved by the Iowa Division of Insurance, or for which the policyholder bears the risk (such as the non-guaranteed portion of a variable life insurance or annuity contract); self-insured employer plans; interest rate yields that exceed an average rate; Medicare Part C and D policies; and fraternal benefit society insurance certificates. Certain, less commonly known insurance policies and arrangements not listed here are also not protected. If you are unsure about whether your policy is excluded from guaranty association protection, you should review the current Iowa Guaranty Association Act.

  13. How will I know if my life or health insurance company has failed or is unable to fulfill its obligations to its policyholders?

    You will receive a notification from the receiver and/or the Iowa Guaranty Association if your insurance company is found to be insolvent and ordered liquidated.

  14. How can I find out if my company is licensed in Iowa?

    Call the Iowa Insurance Division at 515.281.4450. The Division maintains complete and current records of all insurance companies licensed to do business in the state. You may also obtain a listing of Iowa licensed companies at the Division’s Web site at

  15. Why hasn't my agent or company told me more about the Iowa Life & Health Insurance Guaranty Association?

    The law prohibits insurance agents and companies from including the Iowa Guaranty Association in any advertising.

  16. Is there a comparable organization that covers property and casualty insurance contracts?

    Yes. Property and casualty insurance--such as automobile, homeowners, professional liability, medical malpractice, workers' compensation, etc.--may be protected by the Iowa Insurance Guaranty Association. That Guaranty Association can be reached at:

    Iowa Insurance Guaranty Association
    801 Grand Avenue, Suite 3700
    Des Moines, IA 50309-2727
    Phone: 515.246.5812

  17. Where can I get advice on purchasing life, health, or annuity products?

    The Iowa Guaranty Association does not provide financial advice or comment on the financial condition of any particular company. You can obtain advice and information from captive insurance agents, independent insurance brokers, and rating agencies. Generally, captive agents sell products from a single insurer. Brokers usually can sell the products of multiple insurers.

    Rating agencies assign comparative ratings to insurers based on various criteria. Most rating agencies are paid by the insurer to do an assessment examination and to issue a rating. This is the case with the largest and most well-known agencies, such as Standard and Poor’s, A. M. Best, Moody's, and Fitch ratings. Since the companies pay to have themselves rated, those ratings are generally available to the public without charge. One rating agency does not accept payment from the insurer being rated— You must pay to obtain its rating results.

    You may also wish to contact the Iowa Insurance Division regarding information on a particular company.

  18. Are you a State agency?

    No. The Iowa Guaranty Association is a private entity, with its membership made up of all the life and health insurers licensed in Iowa (in fact, under state law an insurer must be a member of the association to be licensed to do business). The Iowa Guaranty Association was created by the legislature to ensure continued insurance coverage and serve as a safety net for Iowa residents should their life or health insurer fail. The Iowa Guaranty Association does work in cooperation with the Iowa Insurance Division in fulfilling its role of protecting residents whose insurance company is being liquidated.

  19. How can I determine the financial soundness of my insurance company?

    Consumers can contact the Insurance Division (515-281-5705) to determine if an insurance company is licensed to write business in Iowa. Consumers can also check the financial strength ratings of the company, which are issued by various ratings agencies (see “Where can I get advice on purchasing life, health, or annuity products?” above).

  20. If my company is in the process of rehabilitation/conservation and I have an emergency and need to withdraw monies from my annuity, what is the process?

    Surrenders and loans may be allowed on a case-by-case basis for genuine hardship situations upon written application to the Receiver. Hardship circumstances and procedures will differ from company to company and (after liquidation) from guaranty association to guaranty association. Examples of hardship cases may include (1) terminal illness or permanent disability; (2) substantial medical expenses not covered by medical insurance; (3) financial difficulties resulting in inability to pay for essential life support needs like food and shelter; (4) imminent removal from a hospital, nursing home, or other medical care facility due to inability to pay; (5) imminent bankruptcy; and (6) immediate need for college tuition payments for a dependent child.

  21. Are variable annuities covered by the guaranty association?

    Generally speaking, a variable annuity contract with general account guarantees will be eligible for guaranty association coverage, subject to applicable limits and exclusions on coverage. However, specific questions regarding coverage will be determined by the applicable guaranty association based on the terms of the contract, other relevant facts, and the guaranty association law in effect at the time of liquidation.

  22. If my company is liquidated, do I have to file a claim with the Iowa Guaranty Association?

    If your insurance company is liquidated, you will receive a notice from the court-appointed Receiver (typically the Insurance Commissioner of the company’s state of domicile), who will oversee the liquidation of the company and inform you of any new claims procedures. There may be no change in the claims submission process—guaranty associations, working with the Receiver, sometimes continue processing claims using the liquidated company’s existing claims staff if that will maximize the speed and efficiency with which claims are processed. In other cases, the associations process the claims themselves or use an independent processing company, known as a third-party administrator, to process claims. In any event, you will be notified of the ongoing claims process. If you wish to continue coverage, you must continue to pay the premium required by your policy.

  23. Should I continue to pay my premiums?

    Yes. If you are paying premiums to your company and wish to keep your coverage in place, you must continue to do so—those premiums go to the guaranty association providing you continuing coverage. If you stop paying premiums, your insurance coverage may be terminated.

  24. Is my company covered by the Iowa Guaranty Association?

    The Iowa Guaranty Association provides coverage to owners of covered policies issued by member insurers (life, health, and annuity insurers licensed to write business in the state). To determine if a company is licensed to write business in Iowa, you may call the Iowa Insurance Division at 515-281-5705. The Division maintains complete and current records of all insurance companies licensed to do business in Iowa. Information about companies licensed to write insurance in Iowa may also be obtained from the Division's Web site.

  25. What happens if the benefits promised in my policy are greater than the coverage limits provided by the Iowa Guaranty Association?

    Guaranty associations, in conjunction with the Receiver, may be able to negotiate a transfer of a company’s policies, up to the amount of the guaranty association benefit limits, to a financially sound insurer. If a guaranty association administers claims against the policy and the benefit limits are reached, any claim in excess of that limit may be submitted as a policyholder-level claim against the estate of the failed insurance company, and the contract holder may receive distributions as the company’s assets are liquidated by the Receiver.

NOTE: This information is not intended as legal advice, and no liability is assumed in connection with its use. The applicable state guaranty association statute is the controlling authority, regardless of any information presented on this site. Users should seek advice from a qualified attorney and should not rely on this compilation when considering any questions relating to guaranty association coverage.