In the case of an insurance company failure, policyholders immediately receive a payout of the cash surrender value of their policies.

Question

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In the case of an insurance company failure, policyholders may receive payouts from state guaranty associations, which are funded by insurance companies and provide some protection to policyholders. However, the amount of coverage varies by state and may have limits, and it may take time for the payouts to occur. The cash surrender value of a policy may not necessarily be the amount that is paid out in the event of an insurance company failure.

In the Case of an Insurance Company Failure, Policyholders Immediately