Jun. 28, 2007

What happens if my insurance company goes belly-up? Will my beneficiary still get paid?

Steve, New Jersey

Dear Steve

Because New Jersey has what is known as a "guaranty fund" that functions much like the FDIC for insurance claims, your beneficiaries will still be able to collect the benefit of your policy — up to the state's limit of $300,000 — even if your life insurance company goes bankrupt.

For more information please read What happens when your insurance company goes belly-up

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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.