An insured holds an individual major medical policy, and the issuing insurer becomes insolvent. What is the maximum amount the Massachusetts Life and Health Insurance Guaranty Association covers for that major medical coverage?

Why D is correct

M.G.L. c. 175, § 146B(3)(b)(ii) tiers the guaranty association's health-benefit coverage, and the highest tier — basic hospital, basic medical-surgical, and major medical benefits — is protected up to $500,000. Lower tiers apply elsewhere: other health benefits not so defined are covered at $100,000, while disability income and long-term care benefits are covered at $300,000. Knowing which tier a product falls into determines the protection available when an insurer fails.

Why the other options are wrong

• A) $100,000 is the tier for health coverage not defined as disability income, basic hospital, medical-surgical, major medical, or long-term care under M.G.L. c. 175, § 146B(3)(b)(ii).
• B) $250,000 is the annuity and structured settlement cap under M.G.L. c. 175, § 146B, unrelated to major medical benefits.
• C) $300,000 is the tier for disability income and long-term care benefits under M.G.L. c. 175, § 146B(3)(b)(ii), one tier below major medical.

Memory hook

Major medical earns the maximum: $500,000 sits at the top health tier.