State RegulationsMA specificDifficulty 1/5
Under the Massachusetts Life and Health Insurance Guaranty Association Law, what is the maximum protection for the death benefit of an individual life insurance policy when the issuing insurer becomes insolvent?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.G.L. c. 175, § 146B(3)(b)(i) fixes the cap for life insurance death benefits at $300,000 per life. When a member insurer fails, the Massachusetts Life and Health Insurance Guaranty Association stands behind the death benefit up to that ceiling, and any protected amount above it is at risk. Candidates should fix this figure separately from the smaller cash-value cap and the annuity cap that live elsewhere in the same subsection.
Why the other options are wrong
- A) $100,000 is the maximum for net cash surrender and withdrawal values within the life benefit under M.G.L. c. 175, § 146B(3)(b)(i), not the death-benefit cap.
- C) $250,000 is the present-value cap for annuities under M.G.L. c. 175, § 146B(3)(b)(iii), not the life death-benefit limit.
- D) $500,000 is the tier for basic hospital, basic medical-surgical, and major medical coverage under M.G.L. c. 175, § 146B(3)(b)(ii).
Memory hook
Life death benefit: three hundred grand per life at § 146B.