State annuity protection

Alaska Annuity Guaranty Protection: $250,000 Limit Explained

Alaska generally provides up to $250,000 in protection for the present value of covered annuity benefits with respect to one life, including eligible net cash surrender and withdrawal values, subject to eligibility requirements and statutory exclusions.

Alaska annuity protection at a glance

Annuity benefit limit
$250,000
Covered annuity benefits valued on a present-value basis, including eligible net cash surrender and withdrawal amounts
Overall benefit cap
$300,000
Most covered benefits are subject to a $300,000 aggregate with respect to one life. This does not increase Alaska’s separate $250,000 ordinary annuity limit. When qualifying health-benefit-plan benefits are involved, the applicable aggregate may increase to $500,000 for one individual.
Who provides protection
Alaska Life and Health Insurance Guaranty Association
The Alaska Life and Health Insurance Guaranty Association is a nonprofit legal entity created by statute and funded primarily through assessments of member insurers. It may act for an impaired member insurer and has specified duties when a member insurer becomes insolvent, subject to AS 21.79.
Insurer requirement
Member insurer
The issuing insurer must qualify as a member insurer under Alaska law, and the policy or contract must otherwise be covered under AS 21.79.

How the $250,000 limit works

Alaska’s $250,000 annuity limit applies with respect to one life and includes eligible net cash surrender and withdrawal values. A separate $300,000 aggregate generally applies, while qualifying health-benefit-plan benefits may be subject to a $500,000 aggregate.

Alaska’s statute states the ordinary $250,000 annuity limit with respect to one life, regardless of the number of policies or contracts.

Coverage limits are generally applied separately to each impaired or insolvent member insurer, subject to Alaska’s eligibility and interstate coordination rules.

Most covered benefits are subject to a $300,000 aggregate with respect to one life. This does not increase Alaska’s separate $250,000 ordinary annuity limit. When qualifying health-benefit-plan benefits are involved, the applicable aggregate may increase to $500,000 for one individual.

  • An eligible participant in a governmental retirement plan established under IRC sections 401, 403(b), or 457 and covered by an unallocated annuity contract may receive up to $250,000 in present-value annuity benefits. This participant amount is included within Alaska’s applicable $300,000 aggregate with respect to one life.
  • Certain other qualifying unallocated-annuity contract owners or plan sponsors may receive up to $5 million in aggregate benefits, regardless of the number of qualifying contracts, subject to Alaska’s plan-sponsor and principal-place-of-business rules.
  • A qualifying structured-settlement payee, or the beneficiary of a deceased payee, may receive up to $250,000 in present-value annuity benefits, subject to Alaska’s eligibility and aggregate rules. Rights acquired through a structured-settlement factoring transaction are excluded.

A $300,000 annuity example

Assume an Alaska resident has an eligible fixed annuity with a covered present value of $300,000 at one impaired or insolvent member insurer and no other covered benefits affecting the aggregate.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

In this example, up to $250,000 may qualify for guaranty association protection. The remaining $50,000 may remain a claim against the insurer’s receivership estate even though the separate $300,000 aggregate has not been reached.

This example assumes ordinary Alaska-resident eligibility and does not rely on the special nonresident coverage rules.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Fixed annuities are generally covered up to Alaska’s $250,000 present-value annuity limit, subject to eligibility requirements and statutory exclusions.

  • Fixed indexed annuity (FIA)

    Generally covered

    FIAs are generally covered to the extent of qualifying insurer-guaranteed benefits. Certain uncredited or forfeitable index-linked amounts may be excluded; however, when value is credited less frequently than annually, Alaska determines the value as though the earlier impairment or insolvency date were the contractual crediting date and treats the resulting amount as credited and nonforfeitable.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    MYGAs are generally treated as fixed deferred annuities and are subject to Alaska’s $250,000 annuity limit and statutory interest-rate restrictions.

  • Variable annuity

    Guaranteed portions may be covered

    Alaska protection can apply to insurer-guaranteed portions of a variable annuity. Separate-account gains or losses borne by the owner generally do not qualify.

  • Registered index-linked annuity (RILA)

    Contract-specific

    A RILA may receive protection for qualifying guarantees made by its insurer. Value exposed to market or index risk borne by the contract owner is generally outside that protection.

  • Unallocated annuity contract

    Limited situations

    Alaska covers unallocated annuity contracts only in the circumstances specified by statute. A qualifying governmental-plan participant may receive up to $250,000, and certain other eligible owners or plan sponsors share a $5 million aggregate maximum.

Who may qualify?

  • Residency is determined on the date a court enters the order determining the member insurer to be impaired or insolvent.
  • For ordinary annuities, eligibility generally follows the qualifying owner or certificate holder. Structured-settlement annuities use separate payee and beneficiary rules, while unallocated annuities use separate contract-owner or plan-sponsor rules.
  • A nonresident may qualify in limited circumstances when the issuing insurer is Alaska-domiciled, the state of residence has a similar guaranty association, and the person is not eligible for protection there because the insurer lacked the required license or authority under that state’s law.
  • The Association applies Alaska’s residency rules and coordinates with other state guaranty associations so that an eligible person receives protection from only one association.

What is not covered?

  • Alaska generally excludes any benefit the member insurer did not guarantee and any amount for which the policy or contract owner bears the investment risk.
  • Interest, crediting rates, or similar factors above Alaska’s statutory limits based on the published monthly average of corporate bond yields may be excluded from guaranty protection.
  • Certain uncredited or forfeitable index-linked amounts may be excluded. If index-linked value is credited less frequently than annually, Alaska calculates the value as though the earlier impairment or insolvency date were the contractual crediting date and treats that amount as credited and nonforfeitable.
  • Policies or contracts issued by nonmember entities are generally excluded. A policy or contract issued in Alaska while a member insurer lacked the required license or certificate of authority to issue it is also excluded.
  • Reinsurance is generally excluded unless the insurer issued an assumption certificate to the policy or contract owner.
  • Self-funded or uninsured employer or association benefit plans are generally excluded.
  • Dividends, experience-rating credits, voting rights, and similar benefits are generally excluded.
  • Unallocated annuity contracts are generally excluded unless they fall within Alaska’s specified benefit-plan or government-lottery arrangements; plans protected by the Pension Benefit Guaranty Corporation are also excluded.
  • Marketing, side-letter, misrepresentation, and other extra-contractual claims are excluded, as are penalties and consequential or incidental damages.
  • Medicare Part C and Part D benefits are excluded.
  • Rights acquired through a structured-settlement factoring transaction are excluded.
  • A policy or contract is excluded to the extent that federal or other law preempts the assessments required under AS 21.79.070.

What happens after an insurer fails?

  1. 1

    Determine the insurer’s impairment or insolvency status

    The court order determining the member insurer to be impaired or insolvent establishes the residency date used under AS 21.79.

  2. 2

    Determine which state guaranty association is responsible

    The Association applies Alaska’s residency rules and coordinates with other state guaranty associations so that an eligible person receives protection from only one association.

  3. 3

    Determine covered contractual benefits

    The Association determines the covered contractual obligation after applying Alaska’s exclusions and interest or index-crediting rules, then applies the applicable annuity and aggregate limits.

  4. 4

    Coordinate guaranty protection with the receivership

    Depending on the circumstances, covered obligations may be continued, transferred, reinsured, or paid. Amounts above guaranty protection may remain claims against the insurer’s receivership estate.

How the guaranty system is financed

The Association is funded primarily through assessments of member insurers. It may retain reasonable amounts in its accounts for continuing expenses and future loss claims.

Assessment allocation
Member insurers
Class B assessments are allocated among Alaska’s statutory accounts and subaccounts and among member insurers based generally on covered Alaska premiums during the applicable three-year period, subject to the statutory allocation rules.
Annual assessment cap
Defined by state law
For each applicable life-and-annuity subaccount and the health account, annual assessments generally cannot exceed 2% of the member insurer’s average annual Alaska premiums on covered business during the three calendar years preceding the year in which the affected insurer became impaired or insolvent.
Premium-tax treatment
State-specific rule
No member-insurer assessment offset is provided in current AS 21.79. Section 21.79.130 instead exempts the Association itself from state and local fees and taxes, other than real property taxes.
Assessment funding and tax treatment
Class A assessments fund administrative and related expenses, while Class B assessments are called as necessary to carry out the Association’s duties for impaired or insolvent member insurers.

What to know before buying

  • Alaska’s $250,000 figure is a statutory maximum, and actual protection depends on the claimant’s residence, the issuing member insurer, the contract terms, and applicable exclusions at the relevant impairment or insolvency date.
  • Alaska prohibits using the existence of the Guaranty Association for sales, solicitation, or inducement to purchase covered insurance or annuity products. The law also requires an approved guaranty-association notice to be delivered with covered policies or contracts.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Alaska guaranty protection may apply to covered contractual annuity benefits when a member insurer becomes impaired or insolvent, subject to AS 21.79.
    FDIC: FDIC insurance may protect eligible deposits at an insured bank.
  • What system stands behind it
    State protection: The Alaska Life and Health Insurance Guaranty Association is a nonprofit legal entity created by statute and funded through member-insurer assessments.
    FDIC: FDIC insurance is federal deposit insurance funded through assessments on insured banks.
  • Coverage-limit basis
    State protection: Alaska generally provides up to $250,000 in present-value annuity benefits with respect to one life at an impaired or insolvent member insurer, subject to applicable aggregate limits and exclusions.
    FDIC: Federal deposit limits are calculated by depositor capacity, account ownership, and insured bank.
  • Whether it applies to annuities
    State protection: Eligible annuity benefits may receive Alaska guaranty association protection, but annuity contracts are not bank deposits and are not insured by the FDIC.
    FDIC: The federal program may insure an eligible bank deposit, not the Alaska annuity.

Sources and last verified

Last verified: September 25, 2026