A policyholder in Raleigh held two individual life policies with the same member insurer that has been declared insolvent: a $150,000 whole life policy with $100,000 of accumulated cash value and a $150,000 term policy. What is the maximum total benefit the North Carolina Life and Health Insurance Guaranty Association will provide for this one life?

Why A is correct

Under G.S. 58-62-21(d)(2) and (d)(6), the Association's coverage for any one life is the LESSER of the person's contractual obligations or $300,000 for all benefits, including cash values, regardless of the number of policies held with the insolvent insurer. Here the contractual total is $400,000 ($300,000 of death benefits plus $100,000 of cash value), so the $300,000 cap controls. The practical consequence is that splitting coverage across multiple policies with one insurer never increases the protection.

Why the other options are wrong

• B) $330,000 is the full contractual value, but G.S. 58-62-21(d)(6) caps recovery at the $300,000 aggregate for all benefits of one life.
• C) $500,000 is the guaranty limit for health benefit plans under G.S. 58-62-21(d)(2a), not the aggregate life insurance limit.
• D) $100,000 would reflect a separate cash-value sublimit, but North Carolina has no such sublimit; cash values are simply folded into the single $300,000 cap under G.S. 58-62-21(d)(2).

Memory hook

One life, one $300,000 umbrella — cash values ride under it, no extra pocket.