State RegulationsGA specificDifficulty 1/5
An insured in Georgia holds a disability income policy from an insurer that becomes insolvent. Excluding the special health benefit plan category, what is the maximum the Georgia Life and Health Insurance Guaranty Association must provide for this disability income coverage?
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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)(ii), the Guaranty Association's obligation for health insurance — including disability income, long-term care, and other health coverage with its cash values — is capped at $300,000. Only coverage classified as a health benefit plan receives the elevated $500,000 per-individual maximum under O.C.G.A. § 33-38-7(a)(12)(D)(i).
Why the other options are wrong
- A) $100,000 caps the net cash surrender value of life insurance under O.C.G.A. § 33-38-7(a)(12)(B)(i); disability income coverage follows the $300,000 health cap.
- C) $250,000 is the net cash surrender cap for annuities under O.C.G.A. § 33-38-7(a)(12)(B)(iii); it does not apply to disability income coverage.
- D) $500,000 applies only to health benefit plans under O.C.G.A. § 33-38-7(a)(12)(B)(ii) and (D)(i); ordinary disability income coverage is capped at $300,000.
Memory hook
Regular health caps at three hundred — half a million is the health-benefit-plan privilege.