Whole life insurance is not secured by the FDIC; it is a product offered by insurance companies and protected by state guaranty associations, not by the Federal Deposit Insurance Corporation.
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How Whole Life Insurance Is Protected
Each state has a life‑and‑health insurance guaranty association that steps in if an insurer becomes insolvent. Coverage limits vary by state, typically ranging from $100,000 to $300,000 per policyholder, and may cover death benefits, cash value, and other policy features.
What the FDIC Actually Covers
The FDIC insures deposit accounts such as checking, savings, money‑market, and certificates of deposit (CDs) at member banks, up to $250,000 per depositor, per insured bank. Because life insurance policies are not deposits, they fall outside the FDIC's jurisdiction.
Comparing Protection Mechanisms
| Protection Type | Governing Body | Typical Coverage Limit |
|---|---|---|
| FDIC Insurance | Federal Deposit Insurance Corp. | $250,000 per depositor per bank |
| State Guaranty Association | State insurance regulators | $100k‑$300k per policyholder (varies) |
Considerations for Policyholders
- Check your insurer's financial strength ratings (e.g., A.M. Best, Moody's).
- Verify your state's guaranty association limits and coverage rules.
- Maintain diversified assets: combine FDIC‑insured accounts with insured life policies for broader protection.