A producer in Aurora is recommending a whole life policy to a prospective client. Consistent with the disclosure standards applied by the Colorado Division of Insurance, the producer should:

Why C is correct

Colorado's disclosure standards, as applied by the Colorado Division of Insurance, require producers to give applicants the material information about a recommended policy — its features, benefits, and limitations — in a clear manner so the applicant can make an informed purchasing decision. Withholding material facts undermines the informed-decision standard and can draw Division discipline.

Why the other options are wrong

• A) The premium alone is not sufficient disclosure; material features, benefits, and limitations must also be communicated for the decision to be informed.
• B) Commission disclosure is not the core of the policy disclosure duty; the applicant must understand what the policy does and does not provide.
• D) Underwriting guidelines are internal insurer criteria; the disclosure duty concerns the policy's material features and limitations, not insurer manuals.

Memory hook

Disclose the deal — features, benefits, and limits — before the pen moves.