A producer in Virginia explains an accelerated benefit rider to an applicant. Under the Virginia disclosure rules (14 VAC 5-70-80), the explanation should tell the applicant that receiving an accelerated benefit:

Why C is correct

14 VAC 5-70-80 requires disclosure so the applicant understands the real consequences of taking an accelerated benefit: the advance reduces the death benefit that remains for beneficiaries, and receipt of the money can affect eligibility for public assistance programs such as Medicaid. Honest disclosure at the point of sale is a regulatory duty under the Virginia Administrative Code framework, not a courtesy, and it protects the consumer from surprises at claim time.

Why the other options are wrong

• A) No premium refund guarantee is part of accelerated benefits; the required disclosure concerns benefit reduction and public-assistance effects under 14 VAC 5-70-80.
• B) An accelerated benefit drains the death benefit rather than increasing it; the disclosure duty in 14 VAC 5-70-80 exists precisely to make that clear.
• D) Ownership does not transfer to the insurer; the accelerated payment is an advance against the policy's own death benefit.

Memory hook

Disclose the double hit: smaller death benefit, possible Medicaid impact.