State RegulationsPA specificDifficulty 1/5
If a Pennsylvania-licensed life insurer becomes financially impaired and cannot pay claims, what is the maximum benefit the Pennsylvania Life and Health Insurance Guaranty Association provides for an individual's life insurance death benefits?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The Pennsylvania Life and Health Insurance Guaranty Association, established under 40 P.S. § 991.1717 and its companion provisions, protects policyholders when a member insurer becomes impaired. For life insurance death benefits, the guaranty limit is $300,000 per individual. This safety net applies automatically to coverage issued by Pennsylvania-licensed insurers, and the caps matter in practice because they bound what an impaired insurer's policyholders actually recover.
Why the other options are wrong
- A) $100,000 is the PLHIGA limit for life cash surrender values, not for death benefits.
- C) $250,000 is the PLHIGA limit for the present value of annuity benefits, not for life death benefits.
- D) $500,000 is the PLHIGA limit for basic hospital, medical, and surgical health benefits, not for life death benefits.
Memory hook
Death benefit shield: $300,000 per life from PLHIGA.