Final answer:
The New Jersey Life and Health Guaranty Association covers life insurance death benefits up to $500,000. The examples given illustrate the concept of actuarial fairness in premiums for different risk groups and how groups are assessed as a whole without individual risk factors. Comparatively, deposit insurance like the FDIC protects bank deposits up to $250,000.
Step-by-step explanation:
The question posed relates to the protections provided by the New Jersey Life and Health Guaranty Association. These types of associations are designed to safeguard policyholders in the event an insurance company fails. After reviewing the options provided (a) $500,000, (b) $400,000, (c) $300,000, (d) $200,000, the correct amount that life insurance death benefit claims are protected up to by the New Jersey Life and Health Guaranty Association is option (a) $500,000.
In relation to the provided examples, which are regarding life insurance and actuarial fairness, it's important to note that these serve to illustrate how risks are assessed and premiums are calculated. The actuarially fair premium would differ for each subgroup (those with a family history of cancer and those without), as well as for the group as a whole, if such risk factors couldn't be accounted for individually.
Lastly, discussing the deposit insurance provided by the FDIC, which protects up to $250,000, offers a relevant comparison about how different types of insurance and guaranty associations function to protect individuals' finances and assets up to specified limits in different scenarios.