State annuity protection

Hawaii Annuity Guaranty Protection: $250,000 Limit Explained

Hawaii generally provides up to $250,000 in protection for the present value of covered annuity benefits, subject to eligibility requirements and statutory exclusions.

Hawaii annuity protection at a glance

Annuity benefit limit
$250,000
Present value of covered annuity promises, including eligible surrender and withdrawal values
Overall benefit cap
$300,000
The annuity amount remains subject to Hawaii’s broader aggregate for covered benefits on the same life.
Who provides protection
Hawaii Life & Disability Insurance Guaranty Association
The Hawaii Life and Disability Insurance Guaranty Association carries out covered duties with the insurance commissioner and receiver.
Insurer requirement
Member insurer
The issuing carrier must meet Hawaii’s member-insurer requirements.

How the $250,000 limit works

Eligible present-value annuity benefits, including qualifying surrender and withdrawal value, are limited to $250,000 under Hawaii law.

Hawaii’s statute combines covered annuity obligations with respect to one life at one failed carrier; HLDIGA’s FAQ describes ordinary examples per owner and member company.

Each failed member insurer is handled separately under the act.

The annuity amount remains subject to Hawaii’s broader aggregate for covered benefits on the same life.

  • Hawaii provides an eligible structured-settlement payee a distinct $250,000 present-value ceiling.

A $300,000 annuity example

Consider a Hawaii resident with one fixed contract worth $300,000 after every statutory exclusion is applied.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

Hawaii assigns $250,000 to its statutory backstop and routes the other $50,000 through the receivership.

The illustration uses the current $250,000 statutory amount and does not estimate receivership recovery.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Hawaii can protect an eligible fixed annuity to a $250,000 present-value ceiling after applying the act’s exclusions.

  • Fixed indexed annuity (FIA)

    Generally covered

    Hawaii FIAs can include insurer-guaranteed value. Certain excess, uncredited, or forfeitable index amounts may be excluded, while a strategy crediting less often than annually uses the failure date as its contractual crediting date for accrued-value calculation.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    For an eligible Hawaii MYGA, the fixed-deferred rules impose the $250,000 maximum and statutory limits on interest crediting.

  • Variable annuity

    Guaranteed portions may be covered

    Variable separate-account risk is not an insurer guarantee.

  • Registered index-linked annuity (RILA)

    Contract-specific

    Hawaii measures the carrier’s enforceable promise, not index or market performance allocated to the contract owner.

  • Unallocated annuity contract

    Generally excluded

    Hawaii excludes unallocated annuity contracts without a plan-sponsor carve-back.

Who may qualify?

  • Residence is measured at the statutory impairment or insolvency point.
  • The individual owner ordinarily controls; specialized payee and participant provisions can apply.
  • A nonresident needs the Hawaii-domicile fallback and lack of home-state coverage.
  • The act coordinates which association answers for a claimant.
  • The issuing carrier must meet Hawaii’s member-insurer requirements.

What is not covered?

  • Nonguaranteed contract elements are outside coverage.
  • Crediting above the statutory benchmark is excluded.
  • For a Hawaii strategy that credits less often than yearly, the statute treats the failure date as its scheduled crediting date when measuring accrued value.
  • Hawaii excludes claims based on sales representations, side agreements, statutory penalties, and indirect damages rather than the policy obligation itself.

What happens after an insurer fails?

  1. 1

    Determine the applicable coverage rules

    The insurer-failure date determines the controlling statutory provisions.

  2. 2

    Check claimant and issuer

    Residence, ownership, licensing, and membership are established.

  3. 3

    Measure eligible value

    Excluded elements are removed before applying the $250,000 line.

  4. 4

    Coordinate the outcome

    The association and receiver continue, transfer, or settle the protected obligation.

How the guaranty system is financed

Hawaii member insurers fund association work through assessments.

Assessment allocation
Member insurers
The act assigns assessments according to accounts and Hawaii premium writings.
Annual assessment cap
Defined by state law
For every statutory account, Hawaii limits what may be assessed from a member during the year to 2% of the applicable premium measure.
Premium-tax treatment
State-specific rule
Hawaii permits five yearly premium-tax offsets after an eligible assessment is paid; each offset equals 20% of that assessment.
Hawaii member assessments
Important note about Hawaii’s legacy disclosure: the still-posted 1991 notice shows the former $100,000 annuity amount, while the current statute and HLDIGA FAQ state $250,000.

What to know before buying

  • Confirm the current statutory limit and contract eligibility before relying on guaranty protection in a concentration decision.
  • Hawaii restricts use of guaranty protection in sales and relies on a prescribed consumer notice.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Hawaii protection covers an eligible insurer-guaranteed annuity obligation under state law.
    FDIC: FDIC insurance covers an eligible deposit balance under federal banking law.
  • What system stands behind it
    State protection: HLDIGA is a privately organized association financed by Hawaii’s insurance industry; it is neither a state agency nor FDIC coverage for annuities.
    FDIC: The federal government stands behind FDIC insurance on eligible bank balances with its full faith and credit.
  • Coverage-limit basis
    State protection: Hawaii measures $250,000 of present value for one covered life at one member insurer.
    FDIC: Federal coverage measures balances by depositor, bank, and ownership category.
  • Whether it applies to annuities
    State protection: A qualifying Hawaii annuity may receive association protection for eligible insurer-guaranteed benefits.
    FDIC: The FDIC does not insure annuity contracts or their insurance guarantees.

Sources and last verified

Last verified: September 2, 2026