State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
A producer is selling a life insurance policy with an accelerated death benefit rider for chronic illness. Under California law (CIC Section 10295 et seq.), the producer must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California requires that when accelerated death benefits are offered for chronic illness, the producer disclose that the benefit is not a long-term care insurance policy and that the differences between the two should be reviewed. This protects consumers from confusing an ADB rider, which pays a life insurance benefit early, with comprehensive long-term care coverage. The disclosure duty is grounded in CIC Section 10295 et seq. and objective LIFE-III.1e.
Why the other options are wrong
- B) An ADB rider is not comprehensive LTC coverage and does not guarantee payment of all nursing home expenses.
- C) Marketing the rider as LTC insurance is exactly what the disclosure rule forbids.
- D) Concealing limitations violates both the disclosure requirement and the duty to act in the client's interest.
Memory hook
ADB for chronic illness is not LTC insurance - the law makes the agent say so.