State
Life insurance in Illinois
Illinois life insurance rules: $300,000 guaranty protection, a 10-day free look, 10% interest on late death claims and a $4 million state estate tax exclusion.
Guaranty association protection
| Guaranty association | Illinois Life and Health Insurance Guaranty Association |
|---|---|
| Life insurance death benefits | $300,000 |
| Cash surrender value | $100,000 |
| Annuity benefits | $250,000 |
| Health benefits | $500,000 health benefit plans; $300,000 disability; $300,000 long-term care; $100,000 other health |
| Overall limit | $300,000 per person ($500,000 for health benefit plan benefits) |
| Notes | HMOs are members; some interest rates promised in policies may be rolled back to a Moody's-based benchmark; unallocated annuities are covered (up to $5 million, per NAIC). |
| Website | ilhiga.org |
Policy rules
| Free-look period | 10 days after delivery (215 ILCS 5/224(1)(n)); 20 days for replacement policies (215 ILCS 5/224(2)) |
|---|---|
| Grace period | 30 days or one month; insurer may charge up to 6% a year interest (215 ILCS 5/224) |
| Interest on delayed claims | 215 ILCS 5/224(1)(l): 10% a year from the date of death unless paid within 31 days of the latest of proof of death, enough information to pay, and resolution of legal impediments |
| Community property state | No |
Taxes
| State estate tax | Yes: $4,000,000 exclusion for deaths on or after January 1, 2013, not indexed (still $4,000,000 in 2026) |
|---|---|
| Inheritance tax | No |
Lost policies and unclaimed money
| Unclaimed property office | Illinois State Treasurer Unclaimed Property (I-Cash) |
|---|---|
| Search unclaimed property | icash.illinoistreasurer.gov |
Regulator
| Insurance regulator | Illinois Department of Insurance |
|---|---|
| Consumer hotline | 866-445-5364 |
| Website | idoi.illinois.gov |
| File a complaint | idoi.illinois.gov/consumers/file-a-compl… |
| Address | 4800 Wabash Avenue, Springfield, IL 62711 (Chicago office: 115 South LaSalle Street, 13th Floor) |
How your policy is protected if an insurer fails
The Illinois Life and Health Insurance Guaranty Association (the Illinois GA) steps in when a life, annuity or health insurer licensed in Illinois is taken over by regulators and ordered liquidated. Its members include every licensed life and health insurer and health maintenance organization (HMO) in the state. Protection is funded by assessments on the surviving members, and it can take the form of paying claims, continuing coverage while premiums are paid, or moving policies to another insurer. Residency is judged on the date the insurer is found impaired or insolvent. If you lived in Illinois then, you keep the protection even if you move away later.
Limits from the association's FAQ, as of October 4, 2026, consistent with NOLHGA's chart (as of June 1, 2025):
| Coverage | Illinois limit |
|---|---|
| Life insurance death benefit | $300,000 |
| Life insurance cash surrender or withdrawal value | $100,000 |
| Annuities (withdrawal and cash values) | $250,000 |
| Health benefit plans | $500,000 |
| Disability income and long-term care | $300,000 each |
| Other health coverage | $100,000 |
| Overall cap | $300,000 per person, however many policies; $500,000 for health benefit plan benefits |
Interest rates promised in a policy or annuity may be rolled back to a benchmark tied to Moody's Corporate Bond Yield Average. The association's liability is also never greater than the benefits the insolvent insurer promised. Unlike many states, Illinois's act also covers unallocated annuity contracts, up to $5 million, according to the NAIC's summary of state guaranty laws.
The Illinois GA is a private entity, not a state agency, and it does not give financial advice or comment on any company's condition. Guaranty protection is a backstop, not a reason to buy from a weak insurer. Most states also forbid agents from using it as a selling point. See state life and health guaranty associations and what happens if your life insurance company fails.
Who regulates life insurance in Illinois
The Illinois Department of Insurance (IDOI) licenses insurers and agents, reviews policy forms, monitors solvency, acts as receiver for failed Illinois companies and handles consumer complaints. It has offices in Springfield and Chicago, and it publishes company and agent lookups so you can check a license before you buy.
Free look, grace periods and policy rules
Section 224 of the Illinois Insurance Code (215 ILCS 5/224) sets the standard provisions for individual life policies.
- Free look: under § 224(1)(n), you have 10 days from delivery to surrender the policy with a written cancellation request and get back all premiums and fees. When a policy replaces existing coverage, § 224(2) gives you 20 days from delivery to get an unconditional refund. See the free-look period: returning a policy for a refund.
- Grace period: the policy must allow 30 days, or one month, to pay any premium after the first. The insurer may charge interest of up to 6% a year for the days used. Coverage continues, and an unpaid premium can be deducted from a claim.
- Claim settlement: a death claim must be settled no later than two months after the insurer receives due proof of death (§ 224(1)(j)).
- Interest on late death claims: under § 224(1)(l), interest accrues from the date of death at 10% a year unless the insurer pays within 31 days of the latest of three dates. Those are when it receives proof of death, when it has enough information to decide liability and the right payee, and when legal impediments such as guardianships or estate appointments are cleared.
Taxes, estates and community property
Illinois has its own estate tax, administered by the Attorney General. The Illinois exclusion has been $4,000,000 for deaths on or after January 1, 2013 (35 ILCS 405/2), and the Attorney General's calculator still uses it for 2026 deaths. That is far below the 2026 federal exclusion of $15,000,000 reported by the IRS. Life insurance you own on your own life counts toward your estate, so a large policy can push an estate over $4 million. Moving ownership to an irrevocable trust is a common planning step. See state estate and inheritance taxes and life insurance. Illinois has no inheritance tax and is not a community property state.
Finding a lost policy or unclaimed benefits
Start with the free NAIC Life Insurance Policy Locator. Participating insurers search their records and contact the beneficiary if they find a policy. Then search the Illinois State Treasurer's I-Cash unclaimed property database for proceeds that insurers turned over to the state. Our guide to how to find a lost life insurance policy covers other places to look.
Life insurers based in Illinois
Illinois is home to six of the 100 largest U.S. life insurance groups:
- State Farm, the life arm of State Farm in Bloomington.
- COUNTRY Financial, also in Bloomington, affiliated with the Illinois Farm Bureau.
- Kemper Life, part of Chicago-based Kemper Corporation.
- Horace Mann, based in Springfield, which focuses on educators.
- Modern Woodmen of America and Royal Neighbors of America, two fraternal benefit societies headquartered in Rock Island.
Where to get help
- Illinois Department of Insurance consumer assistance hotline: 866-445-5364 (toll-free); [email protected]; 4800 Wabash Avenue, Springfield, IL 62711; Chicago office at 115 South LaSalle Street, 13th Floor; idoi.illinois.gov.
- File a complaint: see IDOI's complaint page or email [email protected]. Include your policy and claim numbers and copies of letters. See how to file a complaint against a life insurer.
- Guaranty association: Illinois Life and Health Insurance Guaranty Association, 901 Warrenville Road, Suite 400, Lisle, IL 60532-4324; 773-714-8050.
Neighboring states: Wisconsin, Iowa, Missouri, Kentucky and Indiana.
Sources
- ilhiga.org/FAQ
- ilhiga.org/Contact
- nolhga.com/policyholders/how-youre-protected/
- content.naic.org/sites/default/files/model-law-chart-in-10-life-and-health-guaranty-fund…
- idoi.illinois.gov/
- idoi.illinois.gov/aboutus/contactus.html
- idoi.illinois.gov/consumers/file-a-complaint.html
- ilga.gov/legislation/ilcs/fulltext.asp?DocName=021500050K224
- ilga.gov/legislation/ilcs/fulltext.asp?DocName=003504050K2
- illinoisattorneygeneral.gov/estate-taxes/
- icash.illinoistreasurer.gov/
- irs.gov/publications/p555
Rules and limits were checked against these sources on the review date below. Laws change - confirm with the state insurance department or guaranty association.
Profile last reviewed October 4, 2026