State RegulationsIL specificDifficulty 3/5
One Illinois resident holds a life policy, an individual annuity, and a health benefit plan, all issued by an insurer that is ordered liquidated. How does the Illinois Life and Health Insurance Guaranty Association limit its total protection across her contracts?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
215 ILCS 5/531.01 through 5/531.19 and the association's protection schedule impose an aggregate cap of $300,000 per individual per insolvency on total guaranty protection, with the single exception that health benefit plan benefits are capped at $500,000. Per-product caps therefore never stack without limit — the resident cannot add the life, annuity, and health ceilings together to claim more than the aggregate allows.
Why the other options are wrong
- A) The schedule expressly imposes an aggregate cap; per-product maxima do not stack without limit.
- B) $100,000 is a per-product cap for life cash surrender values and other health insurance, not the aggregate figure.
- C) $250,000 is the individual annuity cap, and the unallocated category does not change how the aggregate limit works.
Memory hook
300K all-in per insolvency — health alone can reach 500K.