West Virginia State Life Insurance Practice Exam

Which statement can a producer guarantee during a sales presentation for a whole life insurance policy?

1. "I will guarantee a death benefit of $1 million."

2. "I will guarantee a return of my commissions as an incentive."

3. "I will guarantee the policy will earn interest at 5%."

4. "I will guarantee approval for all applicants."

The correct answer is: "I will guarantee a return of my commissions as an incentive."

In a sales presentation for a whole life insurance policy, it's important for producers to communicate clearly about the guarantees associated with the policy. The correct answer is related to what can be guaranteed in terms of service and compensation for sales representatives. Producers can discuss aspects like the death benefit and how the policy will perform based on its features, but they cannot guarantee specific outcomes like interest rates, which can fluctuate based on the insurer's financial performance and the general economic environment. Therefore, stating that a policy will earn a fixed rate of return, such as 5%, is misleading, as future interest rates cannot be promised. Additionally, producers cannot guarantee approval for all applicants, as each application is subject to underwriting guidelines and individual assessment. Regarding returning commissions as an incentive, while this does not pertain to the actual performance or terms of the insurance policy itself, it is something within the producer's control in discussions about how they may choose to structure their compensation or incentives for particular sales situations. This can lead to trust and transparency in the sales process, making it a statement they can legitimately make. Thus, the statement about guaranteeing return of commissions is the only one that stands as a legitimate promise within a producer’s authority and practices during a sales presentation