State RegulationsIL specificDifficulty 1/5
For unallocated (group) annuity contracts, what present-value cap does the Illinois Life & Health Insurance Guaranty Association protection schedule reflect?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Unallocated annuity contracts, group contracts such as those funding certain pension arrangements, carry a present-value protection cap of $5,000,000 under the Illinois Life & Health Insurance Guaranty Association schedule, a figure reflected in Illinois Department of Insurance consumer guidance and the framework at 215 ILCS 5/531.01 through 5/531.19. This is vastly higher than the $250,000 individual annuity cap because unallocated contracts serve institutions rather than individual policyowners.
Why the other options are wrong
- A) $250,000 is the cap for an individual annuitant's withdrawal and cash values, not for unallocated group annuity contracts.
- C) $500,000 is the health benefit plan benefit cap, unrelated to annuity contracts.
- D) $300,000 is the life death benefit cap, not the unallocated annuity figure.
Memory hook
Group annuities play in millions: $5,000,000 for unallocated contracts.