State RegulationsTN specificDifficulty 1/5
Under Tenn. Comp. R. & Regs. 0780-1-40, which description best fits 'nonguaranteed elements' in a Tennessee life illustration?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Tenn. Comp. R. & Regs. 0780-1-40 treats nonguaranteed elements as the benefits, values, and costs of a policy that are not guaranteed — items such as projected dividends or current crediting rates that the insurer may change. The rule exists to keep such projections from being presented as promises, a duty the Tennessee Department of Commerce & Insurance supervises through its illustration requirements.
Why the other options are wrong
- A) Contractually promised benefits are guaranteed elements, the opposite category under the rule.
- C) State-mandated endorsements are not what the illustration rule means by nonguaranteed elements.
- D) Free-look and refund rights are policyholder protections found elsewhere in Title 56, not a category of illustrated policy values.
Memory hook
Nonguaranteed = may change: dividends and crediting rates, never promises.