A member insurer becomes insolvent. It had issued three life insurance policies to the same individual; together the policies provide contractual death benefits well above the statutory maximum, and the policies have accumulated cash values. What is the maximum the North Carolina Life and Health Insurance Guaranty Association must provide for all of this person's benefits under these policies?

Why B is correct

Under G.S. 58-62-21(d)(2) and (6), the Association's obligation for any one life is the lesser of the contractual obligations or $300,000 for all benefits, including cash values, regardless of how many policies were issued. Cash values are folded into the single aggregate limit — North Carolina has no separate $100,000 cash-value sublimit and no per-policy stacking — and $500,000 is the health benefit plan cap, not the life cap.

Why the other options are wrong

• A: Adding death benefits and cash values in separate categories exceeds the statutory aggregate; G.S. 58-62-21(d)(2),(6) caps all benefits, cash values included, at $300,000 per life.
• C: North Carolina has no separate $100,000 cash-value sublimit — cash values count within the single $300,000 aggregate under G.S. 58-62-21(d)(2),(6).
• D: The $300,000 limit is per life, not per policy; issuing three policies does not multiply or raise the cap (G.S. 58-62-21(d)(6)), and $500,000 is the health benefit plan limit.

Memory hook

One life, one $300,000 pot — cash values inside it.