A Georgia life insurer becomes insolvent. An insured's policy promises a $500,000 death benefit and currently shows a $150,000 net cash surrender value. What is the maximum the Georgia Life and Health Insurance Guaranty Association would provide for the death benefit and the cash surrender value, respectively?

Why A is correct

Under O.C.G.A. § 33-38-7(a)(12)(B)(i), for life insurance the Guaranty Association covers death benefits up to $300,000 and net cash surrender or withdrawal values up to no more than $100,000. The policy's larger face amount does not raise the association's obligation, and the $100,000 cap applies to cash surrender values only — death benefits are capped at the separate $300,000 figure.

Why the other options are wrong

• B) $500,000 exceeds the $300,000 death-benefit cap in O.C.G.A. § 33-38-7(a)(12)(B)(i); the $500,000 figure is reserved for health benefit plans, not life death benefits.
• C) The cash surrender value is capped at no more than $100,000 under O.C.G.A. § 33-38-7(a)(12)(B)(i); it does not share the $300,000 limit that applies to death benefits.
• D) Both figures are wrong for life insurance: death benefits cap at $300,000 and cash surrender values at $100,000; $500,000/$250,000 mixes the health-plan and annuity caps of O.C.G.A. § 33-38-7(a)(12).

Memory hook

Life guaranty in Georgia: 300 for death, 100 for cash — the surrender number is the smaller one.