State RegulationsTX specificDifficulty 1/5
A Texas agent presents a life insurance illustration showing projected cash values based on the insurer's current scale. Under 28 TAC 21.2201-.2214, what must the illustration do?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under the Texas illustration rule at 28 TAC 21.2201-.2214, an illustration is a presentation that includes nonguaranteed elements, and it must clearly distinguish guaranteed from nonguaranteed values and identify which values are not guaranteed. Projected values based on a current dividend or interest scale are precisely the nonguaranteed elements the rule targets. Presenting them as if they were guaranteed, or omitting the guaranteed column, misleads the applicant and violates the rule.
Why the other options are wrong
- B) The rule does not require the current scale to be omitted; it requires that nonguaranteed values be shown and labeled as nonguaranteed.
- C) Expectation of payment does not make a value guaranteed; current-scale projections remain nonguaranteed and must be identified that way.
- D) Financial statements of the insurer are not an illustration requirement under 28 TAC 21.2201-.2214.
Memory hook
Two columns, always: guaranteed and not guaranteed.