State RegulationsNC specificDifficulty 3/5
An insolvent member insurer issued a single life policy to one North Carolina policyholder; its death benefit and cash value together exceed $300,000. Under G.S. 58-62-21(d), what is the maximum the Life and Health Insurance Guaranty Association provides for this one life?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under G.S. 58-62-21(d)(2) and (d)(6), the Association's aggregate limit 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 aggregate — there is no separate cash-value sublimit and no proportional recovery rule.
Why the other options are wrong
- B) North Carolina has no separate $100,000 cash-value sublimit; cash values count inside the $300,000 aggregate.
- C) North Carolina uses dollar caps, not an 80% proportion of the contractual obligations.
- D) $500,000 is the limit for health benefit plans under G.S. 58-62-21(d)(2a), not the life aggregate.
Memory hook
One life, one cap: $300k with cash values folded in.