Final answer:
The CLHIGA provides a safety net for policyholders, but the specific coverage limits were not provided, and it can vary by state. The FDIC, which ensures bank deposits up to $250,000, serves a similar protection role for banks. Without specific state information, a precise limit cannot be confidently provided in the answer. The correct option is a.
Step-by-step explanation:
The CLHIGA (which likely refers to a hypothetical or specific state's Life and Health Insurance Guaranty Association) provides a safety net for policyholders in the event that a member life and health insurer becomes insolvent.
While the information provided does not specifically detail the coverage limits for the CLHIGA, it does discuss the FDIC (Federal Deposit Insurance Corporation) which ensures bank deposits up to $250,000.
It's important to note that FDIC coverage is for bank deposits and not for insurance policies, but both serve as protection mechanisms for individuals against the risk of institutional failure.
To answer the student's question specifically, the limits for the CLHIGA would depend on the state-specific provisions as they can vary.
Insurance payouts and protections for policyholders are different from the FDIC's deposit insurance, and without specific information on which state's CLHIGA is being referred to, it would not be accurate to provide one of the provided coverage limits as an answer.
That said, the fundamental law of insurance which requires the average person's payments to cover claims, the cost of running the insurance company, and allow for profits, suggests that the protection limits would be set high enough to reasonably cover these aspects in the event of insolvency, but likely not unlimited.
Therefore, a specific figure from the provided options cannot be confidently determined without more information on the state's regulations. The correct option is a.