State RegulationsMI specificDifficulty 2/5
In a life insurance illustration presented to a Michigan applicant, how must values that are not guaranteed be handled?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Michigan follows the NAIC life insurance illustration model through DIFS Bulletin 2000-02, which requires illustrations to distinguish clearly between guaranteed and non-guaranteed values so consumers understand that only guaranteed elements are contractual. Presenting projected values without that distinction misleads applicants and also constitutes misrepresentation of policy benefits under M.C.L. 500.2005.
Why the other options are wrong
- B) Omission is not required; the rules require clear labeling of non-guaranteed values, not their removal.
- C) There is no Insurance Director approval or rounding process for illustration figures.
- D) Two years is the incontestability period under M.C.L. 500.4014 and has nothing to do with when non-guaranteed values may be shown.
Memory hook
Show the math, flag the guesses: non-guaranteed values must be labeled as such.