If a life insurance company goes bankrupt, there are several protections in place to ensure that policyholders’ interests are protected. These protections vary depending on the state and country where the insurance company is located, but generally include the following: State Guaranty Associations: In the United States, each state has a guaranty association that provides protection to policyholders of insolvent insurance companies. The guaranty association is funded by insurance companies and may provide coverage up to a certain dollar limit per policyholder. Policy Transfers: In some cases, a financially sound insurance company may assume the policies of the bankrupt insurance company. This means that policyholders will continue to receive coverage and benefits from the new company. Liquidation: If a life insurance company is unable to continue operating, it may be placed into liquidation. This means that its assets are sold to pay off its debts, including the claims of policyholders. In this scenario, policyholders may receive a portion of their benefits from the liquidation process. It’s important to note that the protections offered to policyholders in the event of a life insurance company’s bankruptcy may not cover all of their claims or provide the same level of benefits as the original policy. It important to note that a life insurance company rarely goes bankrupt.