State RegulationsVA specificDifficulty 2/5
During a sales presentation for a whole life policy, a Virginia producer shows the prospect an illustration projecting substantial future cash values and dividends. Under the solicitation and sales presentation rules, how must the producer treat those projected amounts?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Virginia's solicitation and sales presentation rules under 14 VAC 5-41 require that a presentation accurately reflect the policy being sold. Amounts that depend on future nonguaranteed elements — dividends and projected cash values among them — must be plainly identified as such and may not be dressed up as guaranteed benefits. The producer's obligation is honesty about what the contract promises and what it merely might deliver, so the prospect can compare the policy with others on a truthful basis.
Why the other options are wrong
- A) A history of past dividends does not convert projections into assurances; nonguaranteed values must be labeled as such under 14 VAC 5-41.
- C) The presentation is itself regulated conduct; the existence of a controlling contract does not license a misleading preview of its benefits.
- D) Nonguaranteed values are not banned from presentations — they simply may never be presented as though they were guaranteed.
Memory hook
Show the projection, label the projection — never let a 'maybe' masquerade as a 'must pay'.