Under the North Carolina Life and Health Insurance Guaranty Association Act, the maximum protection for health benefits under coverage that qualifies as a health benefit plan is, for any one life:

Why A is correct

Under G.S. 58-62-21(d)(2a), health benefits are protected up to $500,000 for any one life when the coverage qualifies as a health benefit plan, while coverages not defined as health benefit plans are protected up to $300,000. The $1,000,000 figure is the structured-settlement limit and $5,000,000 the non-governmental unallocated annuity limit under G.S. 58-62-21(d)(5) and (d)(4) — each cap belongs to its own benefit category.

Why the other options are wrong

• B: $300,000 is the limit for coverages that are NOT health benefit plans under G.S. 58-62-21(d)(2a); a health benefit plan earns the higher $500,000 cap.
• C: $1,000,000 is the per-payee limit for structured settlement benefits under G.S. 58-62-21(d)(5), not the health benefit plan cap.
• D: $5,000,000 protects non-governmental unallocated annuity contract holders under G.S. 58-62-21(d)(4); it does not apply to individual health benefits.

Memory hook

Health plan $500k; other coverage $300k.

Why D is correct

Under G.S. 58-62-21(d)(2a), health benefit plans are protected up to $500,000 per life, while coverages not defined as health benefit plans are limited to $300,000. The practical consequence is that the classification of the coverage determines which cap applies, so a producer or claimant must identify whether the product is a health benefit plan before quoting a guaranty figure.

Why the other options are wrong

• A) $300,000 is the limit for coverages that are NOT defined as health benefit plans, the opposite category.
• B) $5,000,000 is the unallocated annuity limit for non-governmental contract holders, unrelated to health benefit plans.
• C) $1,000,000 is the structured settlement limit per payee, not the health benefit plan limit.

Memory hook

Health plans get the half-million shield; everything else gets three hundred.

Why C is correct

Under G.S. 58-62-21(d)(2a), health insurance benefits are protected up to $500,000 for coverages defined as health benefit plans, while coverages not defined as health benefit plans are capped at $300,000. Because the question's coverage is a health benefit plan, the higher $500,000 cap applies.

Why the other options are wrong

• A) The $300,000 figure applies to coverages NOT defined as health benefit plans; a qualifying health benefit plan earns the higher cap.
• B) One million dollars is the structured settlement limit under G.S. 58-62-21(d)(5), unrelated to health benefit plans.
• D) Five million dollars is the unallocated annuity limit for non-governmental contract holders under G.S. 58-62-21(d)(4), not a health limit.

Memory hook

Health plans hit half a million; other health coverage stops at three hundred.

Why B is correct

Under G.S. 58-62-21(d)(2a), health insurance benefits are capped at $500,000 for coverages defined as health benefit plans and $300,000 for coverages not so defined. The association's protection applies per life regardless of the number of policies, so a qualifying health benefit plan is protected up to $500,000 under the North Carolina Life and Health Insurance Guaranty Association framework.

Why the other options are wrong

• A) $300,000 applies to coverages not defined as health benefit plans, and it is also the aggregate life limit including cash values under G.S. 58-62-21(d)(2),(6).
• C) North Carolina has no separate $100,000 cash-value sublimit; cash values fold into the $300,000 aggregate limit under G.S. 58-62-21(d)(2),(6).
• D) $1,000,000 is the structured settlement limit per payee under G.S. 58-62-21(d)(5).

Memory hook

Health benefit plans get half a million; other health coverage gets $300k.

Why B is correct

Under G.S. 58-62-21(d)(2a), health benefits are capped at $300,000 for coverages not defined as health benefit plans and $500,000 for health benefit plans. The higher tier reflects the legislature's treatment of comprehensive health benefit plans as distinct coverage.

Why the other options are wrong

• A) $300,000 applies to coverages that are not defined as health benefit plans, the opposite tier from the plan described.
• C) $1,000,000 is the structured settlement limit under G.S. 58-62-21(d)(5), not the health benefit plan limit.
• D) $5,000,000 is the unallocated annuity limit under G.S. 58-62-21(d)(4), not the health benefit plan limit.

Memory hook

Health benefit plans get $500k; other health, $300k.

Why B is correct

Under G.S. 58-62-21(d)(2a), health benefits are capped at $300,000 for coverages not defined as health benefit plans and at $500,000 for coverages that are health benefit plans. Matching the higher tier to the plan classification is the key step in computing guaranty protection for health coverage.

Why the other options are wrong

• A) A flat $300,000 ignores the enhanced $500,000 limit that G.S. 58-62-21(d)(2a) grants to health benefit plans.
• C) This reverses the tiers; the higher $500,000 cap belongs to health benefit plans, not to other covered health coverage.
• D) The $1,000,000 figure is the structured settlement limit under G.S. 58-62-21(d)(5) and has no application to health coverage.

Memory hook

Health benefit plan gets half a million; other health coverage gets three hundred grand.