Montana State Life Insurance Practice Exam 2025 - Free Life Insurance Practice Questions and Study Guide

The correct answer reflects the maximum liability limit defined by the state’s life insurance guarantee association for an annuity benefit. In Montana, the limit established for annuity benefits asserts that in the event of an insurer's insolvency, policyholders can recover up to $250,000 per individual for their annuity contracts.

This ensure policyholders are protected to a certain degree when an insurer fails, recognizing the length of time annuities typically last and the significant amount of contributions, allowing individuals to have confidence in their long-term financial plans. The defined limit is part of regulatory measures designed to uphold consumer protection.

Understanding the limits prescribed by the guarantee associations is crucial for grasping the safety nets available for policyholders in instances of company insolvency. This illustrates the state's commitment to securing the assets and investments of consumers through robust insurance protections.