The purpose of the Life and Health Insurance Guaranty Association is to?

The Life and Health Insurance Guaranty Association primarily serves to protect consumers from financial loss in the event that an insurance company becomes insolvent. This association is a safety net for policyholders, ensuring that they can recover some or all of their benefits and coverage even if the issuer can no longer fulfill its obligations due to financial difficulties.

This protection is essential because it helps maintain consumer confidence in the insurance market. When consumers know there is a backstop in place for their policies, they are more likely to purchase insurance, ensuring that they have necessary coverage against risks such as health care costs or life events.

Other options, while relevant to insurance practices, do not encapsulate the primary function of the Guaranty Association. Tax benefits and consumer information are more related to the policies themselves rather than the protection offered against insurer failure. Similarly, regulating premium rates is typically the responsibility of state insurance regulators, not the Guaranty Association. Thus, the main role of this association is focused on providing a safety mechanism for consumers in the face of insurer insolvency.