State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under the California life insurance illustration requirements, an illustration of a life insurance policy must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The California illustration rules (CIC Section 10509.950 et seq.) require life insurance illustrations to present both guaranteed and nonguaranteed values, with the nonguaranteed elements clearly labeled as not guaranteed. This prevents buyers from treating interest credits, dividends, or expense assumptions as promises. The illustration is a projection tool under objective LIFE-II.E.2, not a contract guarantee.
Why the other options are wrong
- B) Showing only projected values without guaranteed figures would mislead buyers about what the insurer actually promises.
- C) Illustrated values are projections, not guarantees; only the policy's guaranteed values are contractual.
- D) There is no rule requiring a 20-year dividend projection on every page; the requirement is transparency about which values are guaranteed.
Memory hook
Guaranteed versus projected: illustration separates the promise from the projection.