Life insurance in Pennsylvania

Pennsylvania gives life insurance buyers more time than most states to back out of a replacement policy, and it is one of the few states with an inheritance tax, though life insurance proceeds are exempt from it. Its guaranty association has also handled some of the largest recent insurer failures.

How your policy is protected if an insurer fails

The Pennsylvania Life & Health Insurance Guaranty Association was created in 1978 under the Pennsylvania Guaranty Association Act. All insurers licensed to sell life insurance, health insurance and individual annuities in the state are members. When a member company is liquidated, the association continues coverage, transfers policies to a healthy insurer, or pays claims, funded by assessments on the other members. The limits below are from the association's FAQ, as checked on October 4, 2026.

The association's receivership list shows how these limits get used. It was activated for two Pennsylvania long-term care insurers, Penn Treaty Network America and American Network, liquidated on March 1, 2017, and for Bankers Life Insurance Company and Colorado Bankers Life, two North Carolina companies liquidated on November 30, 2024. It also lists Senior Health Insurance Company of Pennsylvania as in rehabilitation.

The association does not cover policies from insurers not licensed in Pennsylvania, fraternal benefit certificates, self-insured employer plans, interest yields above a statutory average, or the non-guaranteed parts of variable products. Amounts above the limits can be filed against the failed company's estate.

This protection is a backstop, not a reason to choose a weaker company. The association is a private entity made up of member insurers, not a state agency, and Pennsylvania law prohibits agents and insurers from using it to sell coverage. Keep paying premiums if your insurer is in receivership. More in state life and health guaranty associations and what happens if your life insurance company fails.

Who regulates life insurance in Pennsylvania

The Pennsylvania Insurance Department licenses insurers and agents, reviews policy forms, monitors insurer finances and handles consumer complaints and questions through its online Consumer Services portal.

Free look, grace periods and policy rules

• Free look: Section 410D of the Insurance Company Law requires individual life policies to tell you that you can return the policy within at least 10 days of delivery for a full refund. If the policy replaces life insurance or an annuity from a different insurer, the window is at least 20 days; if it replaces coverage from the same insurer or insurer group, it is at least 45 days. See the free-look period: returning a policy for a refund.
• Grace period: life policies must give a grace period of 30 days or one month to pay a late premium, during which the policy stays in force (Section 410). An unpaid premium can be deducted from a claim that arises during the grace period.
• Interest on death claims: under Section 411B, death benefits not paid within 30 days after satisfactory proof of death earn interest from the date of death to payment, at the rate the insurer pays on proceeds left on deposit. If proof of death is submitted more than 180 days after the death, interest runs from the date proof was submitted. The rule applies to all life policies except variable policies.

Taxes, estates and community property

Pennsylvania has no estate tax, but it does tax inheritances. According to the Department of Revenue, the rate is 0% on transfers to a surviving spouse or to a parent from a child 21 or younger, 4.5% to children and other direct descendants, 12% to siblings and 15% to other heirs. The tax is due at death, becomes delinquent after nine months, and earns a 5% discount if paid within three months. Life insurance is the exception that matters here: under Section 2111(d) of the Tax Reform Code of 1971, "all proceeds of insurance on the life of the decedent" are exempt from Pennsylvania inheritance tax. The federal estate tax exclusion is $15,000,000 per person in 2026, according to the IRS. Pennsylvania is not a community property state. See state estate and inheritance taxes and life insurance.

Finding a lost policy or unclaimed benefits

Start with the NAIC Life Insurance Policy Locator, which the Insurance Department links from its life insurance pages, and the other steps in how to find a lost life insurance policy. Unpaid life insurance benefits are eventually turned over to the Pennsylvania Treasury, which you can search free at patreasury.gov. If the insured lived in New York, New Jersey, Delaware, Maryland, West Virginia or Ohio, search those states too. More in unclaimed life insurance money and state unclaimed property.

Life insurers based in Pennsylvania

Lincoln Financial is headquartered in Radnor, Penn Mutual in Horsham, outside Philadelphia, and Erie Family Life in Erie, where it is part of the Erie Insurance group.

Where to get help

• Pennsylvania Insurance Department: 877-881-6388, 1326 Strawberry Square, Harrisburg, PA 17120, pa.gov/agencies/insurance.
• Complaints: ask the insurer or agent to fix the problem first and get any denial in writing. Then file through the department's Consumer Services Online Portal; the department asks consumers to use the portal rather than its general contact form. Our guide to how to file a complaint against a life insurer lists what to include.
• Guaranty association: Pennsylvania Life & Health Insurance Guaranty Association, Two Bala Plaza, Suite 710, Bala Cynwyd, PA 19004, 610-975-0572, palifega.org.