Unlike FDIC insurance payouts, which typically arrive the next business day, SIPC action can take awhile — often one to three months. If the price of your securities has gone up between the time the brokerage fails and when you receive your securities from SIPC, all the better for you. If the price declines while you're waiting for your securities — well, that's a shame. SIPC doesn't protect you against price fluctuations. Nor would it protect you in the highly unlikely case that your money market mutual fund posted a loss.

SIPC also doesn't protect you against shysters who sell you penny stocks that turn out to be — well, penny stocks. Neither does it cover limited partnerships or commodities futures contracts.

SIPC covers cash assets up to $100,000 and replaces up to $500,000 of securities, such as stocks and bonds. (You could receive more if SIPC recovers enough of the firm's assets in legal proceedings.) To get your SIPC claim covered, though, you need to prove which securities you owned when the brokerage failed. So be sure to keep copies of your brokerage statements and confirmation slips.

Suppose, however, you have a whole life insurance policy, with $50,000 in cash value. Let's say your insurance company dies before you do. What happens then?

In that case, you have to contact your state's guaranty association, which insures life and health policies. Each state's guaranty association is slightly different, so you should look up your state's rules. Some set higher limits than those discussed below.

Typically, though, state guaranty associations cover $300,000 in insurance death benefits per insured life. In other words, if you have three insurance policies with a failed company for $200,000 each (or a total $600,000), your guaranty association will provide $300,000 in death benefits.

For whole life policies, which offer insurance as well as a cash build-up, state guaranty funds typically insure up to $100,000 in paid-up cash value per insured life. They also cover individual annuity contracts, usually up to $100,000.

Typically, a state guaranty association won't cover guaranteed investment contracts, or GICs, which are common features in 401(k) savings plans. If you have questions about what is and isn't covered, you'll have to contact your state association.

Unfortunately, no insurance will cover stock tips from your Uncle Ralph, or for choosing a mutual fund based on its past 12 months' performance. But should catastrophe strike your financial institution, you won't have a large smoking crater where your savings once were.