State RegulationsNC specificDifficulty 2/5
A Wilmington woman owned three individual life policies, with cash values, issued by an insolvent member insurer. What is the maximum the North Carolina Life and Health Insurance Guaranty Association provides for all benefits, including cash values, for any one life?
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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)(2),(6), guaranty association benefits for any one life are 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 cap; there is no separate cash-value sublimit.
Why the other options are wrong
- A) $500,000 is the cap for health benefit plans under G.S. 58-62-21(d)(2a), not for life insurance benefits.
- B) $1,000,000 is the structured-settlement cap per payee under G.S. 58-62-21(d)(5).
- C) $100,000 is a model-law cash-value sublimit figure; North Carolina has no separate cash-value cap, because cash values count within the $300,000 aggregate under G.S. 58-62-21(d)(2).
Memory hook
One life, one number: $300,000 with cash values baked in.