I recently read Clark Howard’s “Living Large in Lean Times” book and learned something interesting.
Apparently, there’s a “National Organization of Life and Health Insurance Guaranty Associations” (nolhga.com) site that will allow you to determine the level of protection your state provides in case an insurer goes insolvent.
In the book, Howard states that “Most states have coverage levels of $100,000 to $300,000 for individual policyholders.”
Obviously, this is a good thing to know to look at! When buying a policy, common wisdom is to look at the A.M. Best ratings for a company and buy through on of those with the best rating. This would be another factor to look at.
When researching this, one thing I think I noticed, was that sometimes the guarantee depended on whether or not you were a resident of that state. So when I go to the online consolidated search for life insurance rates, I get quotes from companies across the country. PERHAPS (and this would need to checked on, plus — people move, so consider this, — is it worthwhile to worry about even) it might be best at times, to buy from an insurance company located in your state.
I’d like to include a disclaimer that I’m not a financial advisor, but am presenting ideas I read about and that further research and decision making should be done on this info. In addition, you may find it useful to read Clark Howard’s book. While I knew a lot of what he said, there were gems like this I did not know and maybe you’ll learn some things, too! I was able to check it out through my county library online through the Overdrive service.