Minnesota Life Insurance License Practice Exam

What is the minimum amount of protection for claims under the MN life and health company?

1. $250,000

2. $500,000

3. $1,000,000

4. $2,000,000

The correct answer is: $1,000,000

The minimum amount of protection for claims under the Minnesota Life and Health Insurance Guaranty Association is designed to provide a safety net for policyholders in the event that their insurance company becomes insolvent. The correct answer indicates that this protection level is set at $1,000,000 for life insurance claims. This means that if an insurance company goes out of business, policyholders can rely on this backing to ensure that they do not lose the entirety of their benefits or contributions made under their policies, giving them a sense of security regarding their investments in life insurance contracts. It's important to note that while other levels of protection are offered for different types of insurance claims, the $1,000,000 limit specifically underscores the state's commitment to safeguarding life insurance policyholders.