Not always. There are dollar limits and coverage restrictions in the New Mexico Life and Health Insurance Guaranty Association law. The benefits are determined based on each life or each contract owner rather than by each policy or contract. This statutory approach requires the benefits of all policies or contracts with the insolvent insurance company to be added together before applying the limits in the law. If your insurance company fails, the maximum amount of coverage provided by the New Mexico guaranty association by type of policy or policy benefits is as follows, no matter how many policies of a type you own with the insurance company.
- $300,000 in death benefits per insured life
- $100,000 in cash surrender or withdrawal values per insured life
- $5,000,000 to one owner of multiple non-group life policies
- $500,000 in hospital, medical and surgical insurance benefits per insured life
- $300,000 in disability income insurance benefits per insured life
- $300,000 in long-term care insurance benefits per insured life
- $100,000 in other types of health insurance benefits per insured life
- $250,000 in present values of benefits per insured life
- $250,000 in present values of benefits per plan participant
- $5,000,000 per contract owner
The maximum amount of protection for each individual, regardless of the number of policies or contracts, is $300,000 ($500,000 for hospital, medical and surgical insurance policies).