State RegulationsNC specificDifficulty 3/5
A North Carolina member insurer becomes insolvent. Under G.S. 58-62-21(d), the guaranty association's aggregate limit for life insurance benefits for any one life — including cash values, regardless of the number of policies — is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under G.S. 58-62-21(d), the North Carolina Life and Health Insurance Guaranty Association's obligation for any one life is capped at the lesser of the contractual obligations or $300,000 for all benefits, including cash values, no matter how many policies the person owned. North Carolina folds cash values into the single $300,000 aggregate cap.
Why the other options are wrong
- A) North Carolina has no separate $100,000 cash-value sublimit; cash values count inside the $300,000 aggregate.
- B) $500,000 is the limit for health benefit plans under G.S. 58-62-21(d)(2a), not the life aggregate.
- C) North Carolina uses fixed dollar caps, not a percentage formula, and no $350,000 tier exists.
Memory hook
One life, one cap: three hundred thousand, cash values included.