A policyholder in Raleigh owns three individual life insurance policies issued by a member insurer, with combined death benefits and cash values well above the association's cap. What is the maximum the North Carolina Life and Health Insurance Guaranty Association will provide for all benefits, including cash values, for this one life?

Why C is correct

Under G.S. 58-62-21(d)(2) and (d)(6), the Association's aggregate obligation for any one life is the lesser of the contractual obligations or $300,000 for ALL benefits, including cash values, regardless of the number of policies held. North Carolina folds cash values into the single $300,000 cap rather than adding a separate cash-value sublimit, so owning several policies with the same member insurer does not multiply the protection. Member insurers must also deliver the Commissioner-approved summary document about the Association at or before policy delivery.

Why the other options are wrong

• A) G.S. 58-62-21(d) includes cash values inside the $300,000 cap; there is no separate add-on payment for cash values.
• B) $500,000 is the guaranty limit for health benefit plans under G.S. 58-62-21(d)(2a), not for life insurance benefits on one life.
• D) G.S. 58-62-21(d)(2) and (d)(6) cap coverage per life regardless of how many policies were purchased from the member insurer.

Memory hook

One life, one cap: $300k covers everything, cash values included.