State annuity protection

Kansas Annuity Guaranty Protection: $250,000 Limit Explained

Kansas generally provides up to $250,000 in protection for the present value of covered annuity benefits, subject to a $300,000 overall aggregate and statutory exclusions.

Kansas annuity protection at a glance

Annuity benefit limit
$250,000
Present value of ordinary covered annuity benefits under the schedule in force when association liability arose
Overall benefit cap
$300,000
Kansas combines ordinary annuity protection with the other named benefit categories under a $300,000 ceiling for one life.
Who provides protection
Kansas Life & Health Insurance Guaranty Association
Article 30 assigns Kansas’s association duties for covered obligations during impairment and after insolvency.
Insurer requirement
Member insurer
The issuer must be a Kansas member insurer for the relevant contract.

How the $250,000 limit works

Kansas generally applies a $250,000 present-value limit to covered annuity benefits, subject to its $300,000 combined ceiling and statutory exclusions.

Ordinary contracts at one failed carrier share the one-life category and $300,000 aggregate.

A second failed member insurer creates a separate statutory obligation.

Kansas combines ordinary annuity protection with the other named benefit categories under a $300,000 ceiling for one life.

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

A $300,000 annuity example

Assume a Kansas resident owns one eligible deferred MYGA with $300,000 in covered present value.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

The Kansas association could protect $250,000 in this example; the receiver would handle the remaining $50,000 as an estate claim.

This illustration applies the ordinary Kansas annuity limits and assumes the claimant and contract qualify.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Kansas can cover an eligible fixed annuity to $250,000 in present value after applying statutory exclusions.

  • Fixed indexed annuity (FIA)

    Generally covered

    Kansas excludes excess, uncredited, or forfeitable index amounts and applies its statutory scheduled-crediting-date rule to nonannual strategies.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    Kansas applies its fixed-deferred rules to an eligible MYGA, including the $250,000 maximum and statutory interest-crediting restrictions.

  • Variable annuity

    Guaranteed portions may be covered

    Variable market risk remains outside insurer guarantees.

  • Registered index-linked annuity (RILA)

    Contract-specific

    A RILA enters the Kansas calculation only through a contractual carrier guarantee, not through the market-linked loss absorbed by its owner.

  • Unallocated annuity contract

    Limited situations

    Unallocated annuities are generally excluded except for contracts covering individuals in the Kansas governmental section 457 deferred-compensation plan.

Who may qualify?

  • Kansas residence is determined when a court order finds the member insurer impaired or insolvent.
  • Eligibility depends on the claimant’s role, residence, contract type, and the issuer’s member-insurer status.
  • A nonresident route requires a Kansas-domiciled issuer and lack of home-state protection.
  • Kansas coordinates obligations with the claimant’s resident association.
  • The issuer must be a Kansas member insurer for the relevant contract.

What is not covered?

  • Nonguaranteed value is excluded.
  • Crediting above the Kansas benchmark is removed.
  • Kansas ordinarily removes index value that has not posted or can still be forfeited. For intervals beyond one year, the act calculates accrual at the impairment or insolvency date.
  • Kansas excludes sales or misrepresentation theories, noncontractual remedies, penalties, consequential loss, investment risk assigned to the owner, and most unallocated arrangements.

What happens after an insurer fails?

  1. 1

    Determine which coverage rules apply

    The Association applies the coverage rules in force when it becomes liable.

  2. 2

    Determine eligibility

    Residence, claimant role, member-insurer status, and contract type are checked.

  3. 3

    Calculate covered benefits

    Kansas applies the $250,000 annuity category amount and then the $300,000 aggregate for ordinary covered benefits.

  4. 4

    Handle amounts above the limit

    Amounts not owed by the association remain claims against the insurer.

How the guaranty system is financed

Kansas member insurers are assessed for covered association obligations.

Assessment allocation
Member insurers
Article 30 allocates calls by statutory account and Kansas premium activity.
Annual assessment cap
Defined by state law
Kansas permits each account to assess at most 2% in a year, calculated on the carrier’s average applicable Kansas premium across the relevant three-year period.
Premium-tax treatment
State-specific rule
Kansas contribution certificates are generally written down by 20% per year, and the annual amount written off may be offset against premium-tax liability.
Kansas member funding
Special Kansas exception: a qualifying annuity funding future economic loss from a medical-malpractice judgment or settlement is not subject to subsection (q)’s ordinary dollar caps; that does not remove other contractual, eligibility, or statutory limits.

What to know before buying

  • Use the ordinary $250,000 annuity limit for retirement planning and confirm contract-specific eligibility before relying on it.
  • Kansas prohibits using the association in solicitation and directs the commissioner to prescribe the disclaimer buyers receive instead.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Kansas protection covers eligible annuity obligations through its state guaranty association.
    FDIC: FDIC deposit insurance instead covers eligible balances held at an insured bank.
  • What system stands behind it
    State protection: Kansas member insurers support the Article 30 guaranty association.
    FDIC: Bank assessments maintain the federal fund that responds to insured-depository failures.
  • Coverage-limit basis
    State protection: Kansas caps ordinary covered annuity benefits at $250,000 for each qualifying life.
    FDIC: Federal deposit limits depend on depositor, bank, and ownership category.
  • Whether it applies to annuities
    State protection: A qualifying Kansas annuity may receive protection for its covered insurer obligations.
    FDIC: An annuity contract itself receives no insurance from the FDIC.

Sources and last verified

Last verified: September 2, 2026