State RegulationsOH specificDifficulty 2/5
An Ohio life insurance policy has accumulated a substantial net cash surrender value when the issuing insurer becomes insolvent. Under the Ohio Life and Health Insurance Guaranty Association's coverage limits, what is the maximum provided toward the policy's net cash surrender and net cash withdrawal values?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
ORC 3956.04(D)(2)(a)(i) caps the Guaranty Association's obligation for net cash surrender and net cash withdrawal values under life insurance at $100,000. Candidates often learn the $300,000 death-benefit figure and assume it also covers cash values; the statute caps cash values at the lower $100,000 amount.
Why the other options are wrong
- A) $500,000 is the health benefit plan coverage limit under ORC 3956.04, not the life cash-value cap.
- B) $250,000 is the annuity benefit limit under ORC 3956.04, not the life cash-value cap.
- D) $300,000 is the life insurance death-benefit limit; the cash-value cap under ORC 3956.04(D)(2)(a)(i) is lower.
Memory hook
Death benefit $300,000, but cash values top out at $100,000.