What happens when a life insurer fails? Unlike banks, insurance companies are regulated at the state level -- not the federal level. A state guarantee association is the last line of defense in the event of a failure.

Unfortunately, with state guarantee associations, policyholders are often left waiting and wondering if and when they'll get their money back. There often isn't even a clear-cut timeline about the process, according to Clark.

In the latest example, Shenandoah Life recently failed and is now in receivership after being seized by the state of Virginia.

Clark's longstanding advice is to only buy life insurance or long-term care from insurers that are rated A++ by A.M. Best. Well, Shenandoah Life had a B++ rating!

Don't be tempted by low premiums when you're shopping around. Stick with insurers of top strength -- even if you have to pay more for it.

Finally, there are caps on the protection you can receive under state guarantee associations that vary from $100,000 to $300,000 by state. So if you're going to buy substantial insurance or annuities, be sure to have it split up with different insurers to be proactive about protecting yourself.