State RegulationsMI specificDifficulty 1/5
Which statement correctly describes a life insurance illustration used in Michigan?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The Michigan Department of Insurance and Financial Services (DIFS) adopted the NAIC life insurance illustration model through DIFS Bulletin 2000-02, and under that framework an illustration is a presentation of projected policy values in which non-guaranteed elements must be clearly identified as non-guaranteed. An illustration is not a contract, does not bind the insurer to the projections, and may never be presented as a representation of guaranteed performance. This keeps consumer expectations anchored to the actual policy guarantees rather than to speculative projections.
Why the other options are wrong
- A) An illustration is not part of the insurance contract, and signing a copy does not make it binding.
- C) The buyer's guide and policy summary are separate required disclosures; an illustration does not substitute for either.
- D) No Michigan rule converts non-guaranteed illustration projections into guaranteed values after any period of time.
Memory hook
Illustrations project; they never promise.