I recently read Clark Howard’s “Living Large in Lean Times” book and learned something interesting. There’s a “National Organization of Life and Health Insurance Guaranty Associations” ( nolhga.com ) web site that allows you to determine what 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.” When buying a policy, conventional wisdom is to check a company’s A.M. Best ratings and buy through one of those with the best grade. Where the company has this coverage may be another factor to consider.
When researching this myself, sometimes I noticed that sometimes the guarantee depended on whether or not you were an actual 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 check 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’m not a financial advisor, so please do your due diligence and do further research before making decisions based on this info.
Also, you may find it helpful 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.