State RegulationsAZ specificDifficulty 2/5
After a variable life policy has been in force for two full years, A.R.S. 20-2604 requires the insurer to make policy loans available to the policyowner of at least:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under A.R.S. 20-2604, once a variable life policy has been in force for two full years, the insurer must make policy loans available in an amount of at least 75% of the policy's cash surrender value. This guarantees variable life policyholders meaningful access to their accumulated value through borrowing rather than forcing a surrender to reach the funds.
Why the other options are wrong
- B) The statute sets a floor of 75% of cash surrender value; full-value borrowing is not the required minimum.
- C) A 50% loan availability figure understates the statutory floor of 75% under A.R.S. 20-2604.
- D) A 25% figure is far below the required minimum; A.R.S. 20-2604 obligates the insurer to lend at least 75% of cash surrender value.
Memory hook
Two years in, borrow at least 75% of the cash surrender value.