State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California's life insurance illustration rules (Sections 10509.950-10509.965), an illustration provided to a client must:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California requires life insurance illustrations to clearly separate guaranteed amounts — contractually promised by the policy — from nonguaranteed, projected amounts such as current interest, dividend scales, or expense charges. The illustration must also carry required disclosures, be signed by the applicant and the agent, and a copy must be returned to the insurer before the policy is issued. Presenting projected values as if they were guaranteed is a prohibited practice under the illustration rules.
Why the other options are wrong
- B) An illustration is meant to show both guaranteed and projected values side by side; showing only guarantees would defeat the disclosure purpose.
- C) Dividends and current credited interest are never guaranteed; an illustration cannot promise a projected scale for the life of the policy.
- D) The illustration must be presented before or at the time of application and signed, with a copy returned to the insurer — not deferred until delivery.
Memory hook
Illustration = show the floor (guaranteed) and the forecast (projected) separately. Never sell the forecast as a promise.