State RegulationsGA specificDifficulty 2/5
A Georgia life insurance advertisement describes premium payments as deposits into a 'savings plan' that builds cash for retirement. Under Reg. 120-2-11-.05, this is improper because:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Reg. 120-2-11-.05 prohibits using the words 'investment,' 'profit,' 'deposit,' 'savings,' 'savings plan,' or 'investment plan' in a context that misleads about the nature of the policy. A life policy is not a bank account, and framing premiums as savings deposits obscures the mortality cost, surrender charges, and insurance features. The rule keeps consumers from evaluating life coverage as if it were a deposit product.
Why the other options are wrong
- A) Premiums may be described truthfully in print; the rule targets misleading characterization, not the mere mention of premiums.
- C) Insurers may accurately describe how policy values work; the prohibition is on misleading vocabulary, not on explanations reserved to the Insurance Commissioner.
- D) Retirement references are not banned across the board; the violation is the misleading 'savings plan' framing.
Memory hook
A life policy is not a 'savings plan' — banned words mislead.