State RegulationsMA specificDifficulty 1/5
A Massachusetts life policy has built up cash value, and its insurer becomes insolvent. Within the life insurance benefit, what is the maximum amount the Massachusetts Life and Health Insurance Guaranty Association protects for net cash surrender and withdrawal values?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
M.G.L. c. 175, § 146B(3)(b)(i) caps the guaranty association's protection for net cash surrender and withdrawal values at $100,000 within the life insurance benefit. The Massachusetts Life and Health Insurance Guaranty Association therefore protects surrender values at a deliberately smaller ceiling than the death benefit. Distinguishing the two figures within the same subsection is a classic exam test.
Why the other options are wrong
- A) $500,000 is the health-benefit tier for basic hospital, basic medical-surgical, and major medical coverage under M.G.L. c. 175, § 146B(3)(b)(ii), not the surrender-value cap.
- B) $300,000 is the life death-benefit cap under M.G.L. c. 175, § 146B(3)(b)(i), not the cap on surrender values.
- C) $250,000 is the annuity present-value cap under M.G.L. c. 175, § 146B(3)(b)(iii), not the life surrender-value limit.
Memory hook
Death benefit $300,000, but surrender values only $100,000 — know both ends of § 146B.