State RegulationsGA specificDifficulty 1/5
A Georgia life insurer becomes insolvent. Under the Georgia Life and Health Insurance Guaranty Association Act, the association's maximum obligation for a covered person's net cash surrender and net cash withdrawal values under life insurance policies is:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-38-7(a)(12)(B)(i), the guaranty association's obligation for life insurance death benefits is capped at $300,000, but the cap on net cash surrender and net cash withdrawal values is only $100,000. The two life-insurance caps differ deliberately: protection is broader for the death benefit than for access to cash value. Confusing the surrender cap with the death-benefit cap is the most common error on this topic.
Why the other options are wrong
- A) $300,000 is the life death-benefit cap, not the cash surrender and withdrawal value cap.
- C) $250,000 is the annuity net cash surrender value cap, not the life policy figure.
- D) $500,000 is the cap for health benefit plans, which does not apply to life policy cash values.
Memory hook
Life: death gets 300K, cash out gets 100K — the surrender cap is the smaller door.