An individual's annuity contract was issued by an insurer that later becomes financially impaired. Under 40 P.S. § 991.1717, the Pennsylvania Life and Health Insurance Guaranty Association protects the present value of that individual's annuity benefits, including cash value, up to:

Why C is correct

Under 40 P.S. § 991.1717 and the guaranty association's published limits, the Pennsylvania Life and Health Insurance Guaranty Association covers the present value of annuity benefits, including cash value, up to $250,000 per individual. The annuity cap is one of the association's product-specific limits and is distinct from both the life death benefit cap of $300,000 and the life cash surrender cap of $100,000. Knowing which cap attaches to which product is the testable skill.

Why the other options are wrong

• A) $100,000 is the limit for life cash surrender values and for other supplemental health benefits, not for annuity present values.
• B) $300,000 is the life death benefit and long-term disability/long-term care limit, not the annuity limit.
• D) $500,000 is the basic hospital, medical, and surgical health limit, a health-benefit cap rather than an annuity cap.

Memory hook

Annuities ride at $250,000 — half a million is for health, not annuities.