Texas Life and Health Insurance Guaranty Association limits
If an insurer fails, the guaranty association pays covered claims up to set limits. The exam asks for the numbers and for what is not covered.
| Life death benefit | $300,000 per life (TIC 463.204) |
| Life cash value | $100,000 |
| Annuities | $250,000 present value |
| Health benefit plans | $500,000 |
| Disability income and LTC | $300,000 |
| Other health coverage | $200,000 |
| Not covered | Separate-account values where the owner bears the risk (TIC 463.203) |
Where the point is lost: The aggregate cap per life is $300,000, except that health benefit plans can reach $500,000.
Texas Life and Health Insurance Guaranty Association limits
3 questions on Texas guaranty association coverage limits, each with an explanation and statute citation.
3 questions
Pass line: 70%, same as the real exam
Questions and answers, explained
All 3 questions above, with the correct answer and why it is correct. Everything here is on texas life and health insurance guaranty association limits.
A Texas resident's life insurer becomes insolvent. Up to what amount of death benefit on a single life does the Texas Life and Health Insurance Guaranty Association cover?
Why: TIC 463.204 excludes death benefits above $300,000, and net cash surrender or withdrawal value above $100,000, under life policies on one life. The other caps: $250,000 present value of annuities, $500,000 for health benefit plans, $300,000 for disability income and long-term care, and $300,000 in aggregate per life except for health benefit plans.
Reference TIC 463.204 — Texas outline I.F
Which part of a policy is NOT covered by the Texas Life and Health Insurance Guaranty Association if the insurer fails?
Why: TIC 463.203(b)(1) excludes any part of a policy or contract not guaranteed by the insurer or under which the risk is borne by the owner, which describes the separate account of variable products. Guaranteed life, annuity and health benefits are covered up to the TIC 463.204 limits.
Reference TIC 463.203 — Texas outline I.F
What is the Texas Life and Health Insurance Guaranty Association's maximum for benefits under a health benefit plan on a single life?
Why: TIC 463.204(3) sets $500,000 for health benefit plans, $300,000 for disability income and long-term care insurance, and $200,000 for other accident and health coverages. Health benefit plans are also the one exception to the $300,000 aggregate limit per life.
Reference TIC 463.204 — Texas outline I.F
Drill the whole domain
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