State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
In a California life insurance policy illustration, the values labeled "guaranteed" differ from those labeled "projected" because:
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
An illustration shows how a policy is expected to perform and must clearly distinguish guaranteed elements, such as premiums, death benefits, and cash values the insurer contractually promises, from projected (non-guaranteed) elements based on assumptions like current interest rates and dividend scales. California regulates illustrations under Sections 10509.950 through 10509.965, requiring a narrative summary and a warning that non-guaranteed elements are not guaranteed and may change. An illustration itself is not a contract.
Why the other options are wrong
- B) The labels are reversed: guaranteed values are the contractual promises, not the projections.
- C) Guaranteed values do carry contractual force; the guarantee column is binding as represented.
- D) Guarantees appear in fixed policies too; the guaranteed and projected split applies across policy types that show illustrated values.
Memory hook
An illustration is a forecast, not a promise; only the guaranteed column is locked in.