What is the primary purpose of the Indiana Life and Health Guaranty Association?

The Indiana Life and Health Guaranty Association is designed primarily to protect policyholders in the event that their insurance provider becomes insolvent. Its central mission is to ensure that individuals and families do not suffer financial loss or disruption of coverage when an insurer fails. By stepping in to pay claims, the association serves a critical role in maintaining trust in the insurance system and safeguarding the financial security of policyholders.

This protection is vital because it reassures consumers that their investments in insurance are secure, encouraging them to purchase policies without fear of losing coverage due to an insurer's financial problems. The association typically covers life and health insurance policies, providing peace of mind to policyowners during challenging times.

The other options do not align with the core function of the association. The creation of new insurance policies or offering premium discounts falls outside its mandate, as does the regulation of the insurance companies themselves, which is typically the responsibility of state insurance departments.