New Jersey Life Insurance Exam Practice Question
When discussing policy dividends during a sales presentation, a producer MUST inform the prospective insured that the dividends are
Correct Answer: C
Rationale: When discussing policy dividends, it is essential for a producer to clarify that dividends are not guaranteed (Option C). This transparency ensures that the prospective insured understands the potential variability in dividends, which can depend on the insurer's financial performance and other factors.
Option A (increased semiannually) and Option B (increased annually) are incorrect as they imply a certainty and regularity that does not exist with dividends. Option D (equal to the policy's level death benefit) is misleading, as dividends are separate from the death benefit and can fluctuate based on various conditions. Clear communication about the non-guaranteed nature of dividends is crucial for informed decision-making.
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