State RegulationsAZ specificDifficulty 1/5
Under A.R.S. 20-2604, after a variable life policy has been in force for two full years, what minimum loan access must the insurer provide?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
A.R.S. 20-2604 requires that, after the policy has been in force for two full years, policy loans of at least 75% of the cash surrender value must be available to the variable life policyholder. This guarantees meaningful liquidity once the separate account has had time to build value.
Why the other options are wrong
- A) Loan availability is mandated by A.R.S. 20-2604; insurers may not omit it from variable life policies.
- C) The statutory trigger is two full years in force, not the third policy year.
- D) The loan base is the cash surrender value, not the premiums paid.
Memory hook
Two years in, borrow at least 75% of cash value.