State RegulationsCO specificDifficulty 2/5
While presenting a life policy to a prospect in Boulder, a producer describes it as 'a savings account you can draw on at any time with no strings attached,' although the policy imposes surrender charges and access limits. Under Colorado's life marketing rules, this statement is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Colorado's sales and marketing standards for life insurance, governed under C.R.S. § 10-7-103 and the marketing regulations administered by the Colorado Division of Insurance, prohibit misrepresenting the terms or features of a policy. Describing a product with surrender charges and access limits as a freely drawable savings account creates a false impression of the policy's actual terms. A factual, balanced presentation that permits an informed decision is lawful; an inflated characterization is not.
Why the other options are wrong
- A) Delivery of the policy does not cleanse a misrepresentation made to induce the purchase.
- B) Repetition does not convert a false characterization into disclosure; the content itself is misleading.
- C) State marketing standards bind producer conduct; misrepresentation is not a private matter between producer and insurer.
Memory hook
A life policy is not a piggy bank — say it isn't, and you've crossed the line.