- State Guaranty Association The Illinois Life and Health Insurance Guaranty Association (contact details are in the national directory at nolhga.com) provides limited protection if an insurance company fails. Coverage for annuity benefits is generally $250,000 in present value per contract owner, per insurer. Verify current limits directly with the association. Annuities are not FDIC insured.
- Annuity Tax Treatment Illinois exempts most qualified retirement income, including distributions from employer plans, IRAs, and qualified annuities, from its flat income tax. Earnings from nonqualified annuities are generally taxable, so the qualified versus nonqualified distinction matters here. Confirm your specific situation with a tax professional.
- State Insurance Department The Illinois Department of Insurance regulates annuities sold in Illinois. You can verify any insurance professional's license through its online license lookup.
- Free Look Period Illinois generally provides a free look period of at least 10 days for annuity contracts, often longer for replacement contracts. Your contract states the exact period that applies to you.
- Best Interest Standard Illinois has adopted the NAIC Best Interest standard for annuity recommendations. Advisors recommending annuities to Illinois residents must act in the consumer's best interest.
Retiring in Illinois
Illinois is one of the few states that exempts most qualified retirement income entirely, a significant advantage that surprises many of its own residents.
Learn before you buy
Start with what an annuity actually is, then see how the types differ and which myths to ignore. If someone has already shown you a product, get a free second opinion before you sign.