Don't panic. Chances are you're still at least partially covered. Most countries have established "guaranty associations" or "guaranty funds" that cover life insurance company failures in the same way as failures are covered.

Although the coverage provided by a guaranty association or guaranty fund is limited (typically $300,000 for auto, home, and life insurance policies) and depends upon the financial resources of the guaranty association, in most cases it should prevent you from being left completely without protection if your life insurance company goes belly-up. Typically, the insurance regulators will persuade another life insurance company to take over the policies of the company being liquidated. You will most likely still have coverage, but you may not receive all of the benefits you had hoped for.

Follow instructions. If your life insurance company goes into receivership, you should be contacted by the insurance company itself, the company's receiver (usually the state insurance commissioner), or by the guaranty association. The communication you receive will tell you what you need to do and often contains the forms you need to move your policy to another insurance company. If you don't hear from someone soon after the insurance company is declared insolvent or taken over by a receiver, call the company, your agent, your state's guaranty association, or the state insurance department.