State RegulationsNC specificDifficulty 2/5
A North Carolina resident holds individual life coverage with accumulated cash values from an insolvent member insurer. What is the maximum total guaranty association benefit for that one life, regardless of the number of policies owned?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-62-21(d)(2) and (6), guaranty association benefits for any one life are the lesser of the contractual obligations or $300,000 for all benefits, including cash values, no matter how many policies the person owns. North Carolina folds cash values into the single aggregate cap rather than adding a separate cash-value sublimit.
Why the other options are wrong
- A) North Carolina has no separate $100,000 cash-value sublimit; cash values count inside the single $300,000 aggregate cap.
- C) The $500,000 figure applies to health benefit plans under G.S. 58-62-21(d)(2a), not to life insurance death benefits and cash values.
- D) North Carolina uses fixed dollar caps under G.S. 58-62-21(d); no percentage-of-obligations formula exists.
Memory hook
One life, one pot: $300k total, cash values included.