What Happens When A Life Insurance Company Fails?

  1. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    When life insurance companies fail, they are almost always bought by other life insurance companies. The new life insurance companies usually treat those policies as they do their own business, honoring all the guarantees and dictates that were in place when the policies were taken out. If the failed company could not be purchased by or merged with another solvent company, there are state pools that will pay out a certain amount of the death benefit in lieu of insurance companies being unable to do so.
    Answered on November 11, 2013
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