State RegulationsTX specificDifficulty 1/5
A Texas-authorized life insurer is placed in liquidation, and a Texas resident holds an individual life policy on her own life with a death benefit above the Association's limit. Under TIC Chapter 463, what is the maximum the Texas Life and Health Insurance Guaranty Association will pay for a life insurance death benefit on one insured life?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under TIC Chapter 463 the Association's limit for a life insurance death benefit is $300,000 for each insured life, measured per insolvent company. The other figures belong to different coverages: $100,000 is the limit for net cash surrender or withdrawal value, $250,000 is the present value limit for an individual annuity, and $500,000 is the limit for basic hospital, medical-surgical and major medical health benefits. Remember the threshold condition as well: the policyholder must have been a Texas resident on the date of liquidation.
Why the other options are wrong
- A) $500,000 is the health benefit limit for hospital, medical-surgical and major medical coverage.
- B) $100,000 is the net cash surrender and withdrawal value limit, not the death benefit limit.
- C) $250,000 is the present value limit for an individual annuity.
Memory hook
Death benefit $300K, cash value $100K, annuity $250K, health $500K.