The $250,000 Figure Most Annuity Sites Give North Carolina Is Wrong — It’s $300,000, With a Catch

Correcting the number upward without reading the rest of the section would replace one error with another. In most states, the annuity limit is one line in a menu — a separate death-benefit limit, a separate cash-value limit, and then an aggregate cap stacked on top — a pattern visible across NOLHGA’s “How You’re Protected” table (nolhga.com, as of June 1, 2025, accessed August 15, 2026). North Carolina’s statute skips the menu. Subsection (d)(2) is a single $300,000 figure for all benefits including cash values, and subsection (d)(6) confirms the Association is never obligated beyond an aggregate $300,000 per life across those coverages — the sole exception being health benefit plans, which carry their own $500,000 ceiling under (d)(2a)b. So a North Carolinian holding a $300,000 annuity and a $300,000 life policy at the same failed insurer is not looking at $600,000 of protection. The two contracts share one roof.

The association’s FAQ demonstrates the per-owner mechanics with its own numbers: an individual who owns three $200,000 annuities with one insolvent insurer — $600,000 of contract value — has guaranty coverage of $300,000, total. The excess becomes a policyholder claim in the receivership, with distributions possible as the estate’s assets are sold off, in the FAQ’s telling (nclifega.org/FAQ, checked August 15, 2026). The association applies that ceiling to the combined covered obligations at one failed member company.

Two categories break upward from the model most states follow — again per NOLHGA’s “How You’re Protected” table (nolhga.com, as of June 1, 2025, accessed August 15, 2026) — and both are in the statute. Payees of structured settlement annuities who reside in North Carolina are covered to $1,000,000 under § 58-62-21(d)(5) — against $250,000 for the same payee under Illinois law (215 ILCS 5/531.03(3)(b)(iii), ilga.gov) and $300,000 under Georgia’s § 33-38-7(a)(12)(C). An injury victim’s settlement annuity is protected four times as heavily in Raleigh as in Chicago, a comparison computed here from the three statutes’ own figures. Unallocated annuity contracts carry a $5,000,000 per-contract-holder limit under (d)(4). Neither figure appears in the flattened table that puts the state at $250,000.

The exclusions in subsection (c) start with the one annuity buyers most need: any part of a contract “not guaranteed by the member insurer, or under which the risk is borne by the policy or contract owner” — the separate-account value of a variable annuity, in the FAQ’s plain-language version. Interest is covered only up to a formula: crediting averaged over the four years before impairment or insolvency is capped at Moody’s Corporate Bond Yield Average minus two points, and minus three points after that date, per (c)(3). Index-linked interest not yet credited on the impairment date falls out under (c)(10), and a payee who sold structured-settlement payment rights in a factoring transaction is excluded under (c)(12).

Timing is its own limitation. If an insurer is failing, ongoing benefit payments “may be reduced or suspended by the courts in order to sort out the affairs of the financially troubled insurer,” and the FAQ puts the possible wait for activation in months, with hardship relief available through the receiver on a case-by-case written application — both from the association’s FAQ (nclifega.org/FAQ, checked August 15, 2026). Coverage follows where the owner lives on the day the liquidation order enters, wherever the contract was purchased; residents of states where the failed insurer was never licensed generally fall to the domiciliary state’s association, per the same FAQ.

G.S. 58-62-86 does two opposite-sounding things at once, and the association posts the full text on its own site (nclifega.org, Advertising Prohibition page, checked August 15, 2026). Subsection (a) forbids anyone from using the Association’s existence “for the purpose of sale or solicitation of or inducement to purchase” covered insurance. Subsections (b) and (c) then require that a summary document go out with covered policies — one whose Commissioner-prescribed disclaimer must “prominently warn” that coverage may not apply, is subject to substantial limitations, is conditioned on continued North Carolina residence, and should not be relied on when selecting an insurer. The one document about the guaranty fund the law guarantees you’ll receive is the one telling you not to lean on it.

The statute’s source line records amendments in 2009, 2010, 2013, 2018, and 2022; whether an insolvency predating those amendments would be governed by older, lower limits was not reviewed and is not claimed. Whether joint owners of a single contract each get a separate $300,000 limit, and how residency is tested for trust-owned contracts, are answered on none of the association pages read on August 15, 2026. No official figure exists in those materials for typical months-to-payment in a North Carolina liquidation. All four points are omitted from the coverage description above rather than guessed.

Because life and annuity benefits share one $300,000 ceiling per failed insurer in North Carolina, an owner with covered life-insurance value at that insurer has less of the shared ceiling available for an annuity claim. A different insurer’s failure would be evaluated separately. This is the statute’s aggregation rule after a failure, not a recommendation to add carriers, divide a purchase, or select an insurer based on guaranty coverage.