State RegulationsMA specificDifficulty 1/5
What is the maximum coverage provided by the Massachusetts Life and Health Insurance Guaranty Association for an individual's life insurance death benefits?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.G.L. c. 175, § 146B caps the guaranty association's coverage of life insurance death benefits at $300,000 per life. The same statute separately limits net cash surrender and withdrawal values to $100,000 within the life benefit, so the death-benefit cap and the cash-value cap must be kept straight. A producer who understands the cap can set realistic expectations, but may never use the guaranty association's coverage as a sales inducement under the Massachusetts Life and Health Insurance Guaranty Association Law.
Why the other options are wrong
- A) $100,000 is the guaranty cap for net cash surrender and withdrawal values within the life benefit under M.G.L. c. 175, § 146B, not the death-benefit cap.
- B) $250,000 is the guaranty cap for annuities measured by present value under M.G.L. c. 175, § 146B, not the cap for life death benefits.
- D) $500,000 is the guaranty cap for basic hospital, basic medical-surgical, and major medical benefits under M.G.L. c. 175, § 146B, not for life death benefits.
Memory hook
Life death benefits top out at $300,000 in the Massachusetts guaranty safety net.