A producer offers to give every customer who buys a policy a 'free' $500 life insurance policy. Under California Insurance Code Section 777.1, this practice is:

Question

Accepted Answer

Prohibited — insurance may not be given away as an inducement

Answer

Permitted if the free policy is for a different line of insurance

Answer

Permitted if the customer pays a nominal processing fee

Answer

Permitted only for policies under $1,000 in face amount

A producer offers to give every customer who buys a policy a 'free' $500 life insurance policy. Under California Insurance Code Section 777.1, this practice is:

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