State RegulationsMI specificDifficulty 1/5
A Michigan resident holds an individual major medical policy providing basic hospital, medical, and surgical benefits when the insurer becomes insolvent. What is the maximum coverage provided by the Michigan Life and Health Insurance Guaranty Association for these benefits?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
M.C.L. 500.7704 gives basic hospital, medical, and surgical benefits the highest guaranty cap in the Michigan Life and Health Insurance Guaranty Association structure: $500,000. This benefit class alone rises above the general aggregate framework that otherwise applies at $300,000 per life, reflecting the essential nature of hospital and medical coverage for continuing care after an insolvency.
Why the other options are wrong
- A) $100,000 is the cap for cash surrender values and for health benefits other than basic hospital, medical, and surgical coverage.
- B) $250,000 is the annuity present value cap, which does not apply to hospital and medical benefits.
- C) $300,000 is the general aggregate figure for most benefits, but basic hospital, medical, and surgical benefits carry the higher cap.
Memory hook
Hospital care tops out at half a million.