State RegulationsAZ specificDifficulty 2/5
Before an application is even submitted, a Chandler producer promises a prospect a complimentary television if the policy is purchased. Under Arizona law, this promise is:
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 B is correct
Under A.R.S. 20-449, offering any advantage not specified in the policy as an inducement to purchase life or disability insurance is prohibited. Prior approval does not convert a prohibited inducement into a lawful one, and the offer is actionable before any application is signed.
Why the other options are wrong
- A) Insurer approval does not legalize an inducement that Arizona insurance law prohibits.
- C) Rebating rules apply whenever the advantage is used to induce the sale, not only after issue.
- D) No high-value threshold legitimizes the offer; any advantage not specified in the policy is prohibited.
Memory hook
TVs for signatures — off-policy perks are prohibited inducements.