What is the maximum death benefit coverage by Virginia Life Insurance Guaranty Association?

The correct answer indicates that the maximum death benefit coverage available through the Virginia Life Insurance Guaranty Association is set at $300,000. This figure is crucial because it defines the limit of protection provided to policyholders in the event that their life insurance company becomes insolvent or unable to pay claims. The Virginia Life Insurance Guaranty Association was established to protect consumers by ensuring that they receive some benefits even if their insurer fails financially, and understanding the coverage cap helps beneficiaries and policyholders gauge their potential recovery in such circumstances.

This is an essential aspect of consumer protection in the insurance industry, as it fosters confidence among policyholders knowing that there is a safety net in place. Being familiar with these limits is important for both insurance professionals and consumers, as it directly relates to the financial security of individuals relying on life insurance for their long-term planning needs.