Both the Illinois Life & Health Guaranty Association and the Illinois Insurance Guaranty Fund are there for the rare occasion when an Illinois-licensed insurance company is no longer able to pay its obligations.

The Illinois Department of Insurance is the state regulatory agency charged with monitoring insurer activity and financial health. A receiver is appointed to collect assets and determine outstanding liabilities if IDOI determines company liquidation is necessary. Policyholders and claimants get written notification and instructions when this happens.

There are limits on guaranty fund/association payments. As of 2011, property and casualty claims are limited to $500,000 in most cases. Life insurance claims have a maximum of $300,000 per life. Single health insurance claims, and long-term care benefits stop at $300,000. Annuity claims have a $250,000 cap for withdrawal and cash value.