State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California's life insurance illustration requirements (CIC Sections 10509.950 et seq.), a policy illustration must clearly distinguish between:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California law requires that life insurance illustrations show guaranteed elements separately from non-guaranteed, projected elements, so consumers can see exactly which values are contractually promised and which depend on the insurer's future experience. If a policy is illustrated using nonguaranteed dividends or interest, that fact must be clearly stated, and the illustration must not be presented as a guarantee.
Why the other options are wrong
- B) Commission disclosure is a separate matter; the illustration requirement concerns the values being illustrated, not compensation.
- C) Age differences between applicant and insured are not what the illustration format must segregate.
- D) The illustration must separate guaranteed from nonguaranteed values, not merely display the cash value and the payment mode.
Memory hook
An illustration shows what is promised (guaranteed) and what is hoped for (projected) in two clearly separated columns.