State RegulationsMA specificDifficulty 2/5
An individual owns several nongroup life insurance policies on different insureds, all with the same insurer, which becomes insolvent. Under M.G.L. c. 175, § 146B(4), what aggregate limit applies to this one owner?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.G.L. c. 175, § 146B(4) caps aggregate protection at $5,000,000 for one owner of multiple nongroup life insurance policies, no matter how many insureds the policies cover. The Massachusetts Life and Health Insurance Guaranty Association therefore limits exposure per owner, not merely per insured life. This owner-level aggregate is easy to overlook when studying the per-life caps.
Why the other options are wrong
- A) The caps do not stack without limit; M.G.L. c. 175, § 146B(4) imposes an owner-level aggregate ceiling precisely to bound the accumulation.
- C) $100,000 is the cap on net cash surrender and withdrawal values within the life benefit under M.G.L. c. 175, § 146B(3)(b)(i), not the multi-policy aggregate.
- D) The other policies do not lose protection; they share in coverage up to the owner-level aggregate limit of M.G.L. c. 175, § 146B(4).
Memory hook
One owner, many lives: five million catches them all.